Young Entrepreneurs obviously look up to investors because they have deep pockets. And investors too will be thinking many times before making an investment. Entrepreneurs must be smart enough to convince the funders to invest in your business.
Here, in this blog, we summarize few generic questions an entrepreneur should ask an investor so that he shouldn’t take a back step to fund in your business.
1) Can you tell me what is wrong with my idea?
This question will definitely force an investor to engage with you. He will surely challenge your assumptions and thus some of your valuable time gets saved.
Moving on, he will start investing his intellectual knowledge for your business to grow. Later, this will certainly force him to invest financially as he will be already imagining to be a part-owner in your company.
2) What are your expectations as for the company and the Startup CEO?
Getting straight to the point always saves time. If would be an advantage if an entrepreneur’s vision lies parallel to that of an investor’s vision. The investor should truly understand the magic behind your idea.
3) What has been your most disappointing venture and why?
As it is important to find how the investor faces the success, it is also important to find out how he can handle disappointments- so that you can avoid it.
4) Can you refer me to entrepreneurs you have worked with in the past – both successful and failed?
By asking this question, you can learn how an investor got engaged with the other portfolio companies, the winners as well as the losers. Blind reference checks can also be conducted as well. Also, find out those portfolio companies which were not recommended and call the CEO or the founder. It is quite difficult to inquire but once done, you will be glad to know how an investor handles struggles.
5) What is your investment timeline?
This question too plays a pivotal role in knowing how much time does an investor want to fund your business. Does he quit after a year or he have a long term plan for five years or more?
An entrepreneur must be sure that he and his investor agree on the same horizon and the timeframe.