Do you have any current investments that would be considered a direct rival or close competitor to me?
You don’t want to be on the wrong end of a fund looking to gather competitive information to aid their current portfolio to your own detriment.
Why are you particularly exited by my company and this space?
Uncovers whether or not the investor has a genuine thesis for your sector or not.
What are your superpowers?
Much like founders, investors come with different skill sets. Some are better at recruiting than marketing for example. If you need help on the financial side of things do they have expertise in this space and time to train you up?
When was your last fundraise?
How much dry capital do they a have left to invest? Are you multi-stage?
Will you lead my round?
What is your firms’ organisational structure? How are decisions made? Who will be on the board?
What type of information will you request and how frequently?
How will you add value beyond capital? Can you share some specific examples?
Do you have any complimentary investments in your portfolio?
Questions to ask when referencing a venture capital fund
- Tell me about the dynamic of the board. How does this investor contribute relative to others around the table? How much air time do they consume?
- Tell me about a stressful moment when things were not going well. How did this investor respond?
- How did the investor respond when you messed something up?
- Did you ever face serious financing risk? How did the investor help or contribute to your stress in this situation?
- How does follow-on decision-making work at their firm? What hoops did you have to jump through to figure out their follow-on investment? How did this differ in a weak vs. strong financing round? Are you aware of any internal rules that govern how the firm approaches follow-on financing?
- Where is this investor not as strong as others? Does he/she know this?
- Can you think of something specific that the investor did to help you in the last 3 months?
- Has the investor ever gone out on a limb for you, and done something helpful that has real cost to them?
- Has this investor ever introduced you to a customer you closed or to a candidate that you gave an offer to? If not, did any of your other investors do this?
- If you raised capital for your next company at this stage, who would be your first three calls and in what order?