Pitching investors successfully is not about making them want to immediately invest in your project. Surprised? The ultimate goal lies in getting them interested enough to talk with you further. Moreover, even if they reject your deck, you can still benefit from it. Read on to find out how you can do that.
It All Starts with Asking Proper Questions
Let’s face the music – the chances they will invest in your startup are no more than 10% (that’s what statistics say). This means there are more than 90% you’ll get rejected. However, this also means you can use 90+% of your time wisely and get the needed info from your investors, by asking the right questions. That’s how you win from a failed meeting.
In this article, we’re gonna give you insights into 19 questions that are good to ask while pitching investors. Before getting straight into them, make sure you treat the fundraising meeting in a proper way.
Building Your Winning Mindset
If you aim to nail pitching your investors, setting yourself up for a successful meeting is more than vital. In our experience, before you start pitching them, you will want to bear in mind that…
- A fundraising meeting is not a one-way monologue. It’s a collaboration of two sides in a discussion. Don’t run through your presentation, trying to cram as much info into it as possible. Give your investors an opportunity to speak too.
- Spend only 1/3 of your time presenting your startup and 2/3 asking the right questions. Since more chances are that they will not invest in your project, the time you ask your questions is probably the most valuable. This is the time you get the info that will help you improve your startup/pitching strategy.
- Talk with your investors as equals. The thing that you are asking for help doesn’t mean you are in a lower position. The best fundraising meetings always look like conversations between equals.
- Remember: investors you’re pitching can not only give you money, but also something which is even more valuable. They’re your info resources. They’ve talked with hundreds of startups and possess different insights which you may be simply not aware of. Now, since these info resources are sitting right in front of you, all you need to do is ASK the right questions. We’ve prepared a list of what we think could be great questions to get important info from investors. Let’s take a look at them.
Why did you decide to take the meeting with us?
This is another way to ask your investor why they find your startup attractive and what makes your startup differ from hundreds of others of the same type. If they have scheduled a meeting with you, there should definitely be important reasons for that. Knowing them adds to the understanding of your startup’s advantages as well as to your confidence in approaching other investors in the future.
When you discuss my deck with your partners, how will you describe our startup?
A great way to check if the investor’s got the main points of your presentation. On top of that, this is your opportunity to see what your investors consider important to them when looking at your startup. Maybe, you’ll need to change something in your deck to adjust it to what investors are really looking for.
What could be the negatives/obstacles your partners and you may think of when they look at this business?
If you yourself haven’t introduced the possible negatives of your startup in your pitch deck, this is your chance to hear what investors think could prevent your business from growing. Listen and learn.
How do you think my company will fit in your portfolio?
Again – another way to find why your investors find your startup interesting. Besides, this question will help you understand if there is any potentiality for collaborating with the startups they’ve already partnered with.
What are the things you think we may be underestimating?
If there’s anything you might be missing in your pitch deck or your budget estimations are not proper, this is your chance to ask the very investors what they think may be wrong with them. This info will definitely help you improve your deck, so be patient and open to what they could suggest to you.
Do you have any concerns about investing in our startup?
Firstly, asking this question may help you see things you haven’t taken into consideration while preparing your deck. It could also help you better understand why people may not be willing to invest in you, especially, if you get often rejected. Finally, if they do have any concerns, you could try to refute their objections on the spot and not leave a chance to gently reject you.
How many other companies are targeting the same sector/you?
You want to know how big the competition is, don’t you? Go ahead and ask your investor directly.
Could you name any successful companies this startup reminds you of?
If you haven’t done your research before, let your investors tell you what companies succeeded in your industry/getting funds from them. Moreover, you could read more on their success history after the meeting or even contact them on LinkedIn to ask for a piece of advice or whatever. Use your chance.
Have you met with somebody trying this business but failing?
The same goes for this question – learn the names of those who have already been there and got their lessons. Find them on the Internet and try to connect. Very often, bad stories give even more experience/useful info than the successful ones.
What do you think are the biggest opportunities for us in this industry?
This is your chance to get a professional look at your business and see how promising it is in terms of development. Maybe, there’s something you haven’t taken into account? Ask and you’ll see.
Am not asking for introductions, just being curious. Who would you also recommend as an investor for this type of business?
A tricky yet simple way to see whom else you could approach for fundraising.
What do you think we should improve on the pitch?
If you don’t understand why your pitch deck keeps getting rejected, this is your chance to hear the point of view of the ‘end user’. Listen carefully and make the needed improvements as soon as you’re available. At the end of the day, this is what the meeting is all about – getting important info.
Whom else would you like to see on our board?
When dealing with VCs, you should remember that some of them may want to assign more team members or choose a CEO of their own. It’s important that you get aware of whom else they’d like to put on there before they decide to invest in your startup. It could be a senior partner who could bring lots of value to your startup or simply a junior associate. It’s crucial you have the best people in your team.
What would you want us to do after closing?
Any good cooperation starts with a clear understanding of what each party is going to be responsible for and establishing exact expectations from that partnership. Get prepared beforehand and find out at once what they expect you to do and what they would like to do with your company in terms of your collaboration.
How long does it typically take you to close?
In making deals, timing is everything. Find out whether both of you can work within a chosen time frame from the very beginning. It may turn out that your investors cannot adjust their processes to yours or the whole investment process takes longer than you expect. A fundraising meeting is your perfect time to figure out whether you fit each other in terms of deadlines.
Who else has to approve this investment?
It is important to know who exactly you need to get interested in your project, otherwise, you’re wasting your time. If you’re talking to a decision-maker, that’s great. However, if this is a low-level associate, this means the final decision will be made by someone whom you’ve probably haven’t even seen.
What is the status of your fund?
This question will give you an idea if the VC has enough money to invest in your startup and whether they’re capable of making follow-on investments over time, too. You may also follow up by asking directly how many investments they make per year and what their typical investment size is.
What metrics are you tracking during the investment process?
Raising capital may be a long process which needs to be tracked. Find beforehand what KPIs they are going to track since knowing what specific things your investors are looking for in an investment will help you understand if you could really be a good fit for them.
What could your deal breakers be?
Understanding why an investor is willing to invest in you is great. However, no less important is knowing why they could be not interested in dealing with your startup. Learn the potential deal blockers so that you could make the needed improvements on time or (if needed) move to pitching other investors if you don’t comply with the requirements of this one.
In “Pitching Your Startup to Investors: Things You Should Keep in Mind to Succeed”, we’ve mentioned that for every 100 pitches an investor hears, they give funds to only 1 of them. Since chances they’ll invest in your startup are not high, the good thing you could do in a fundraising meeting is to get as much useful info from them as possible. Use your meeting as an opportunity to not only present your project but also to LEARN what things could be improved in both your deck and startup. The 19 questions provided above will help you better understand your investors, improve your pitch deck, and eventually get fundraising from the right investors.
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