aking founder calls can be intimidating for aspiring or new VCs. The early days in the industry often come with nerves and uncertainty, especially when speaking with experienced founders.
There are several reasons why these calls can be daunting:
- Experience Gap - Founders often have more industry experience.
- Investment Criteria - Understanding what makes a good VC investment takes time.
- Pitch Preparation - Figuring out the necessary information to pitch a new deal to your team.
- New Industries and Ideas - Navigating unfamiliar sectors and innovative concepts can be challenging.
- Firm’s Thesis - Getting acquainted with your firm's investment thesis.
These are just a few of the challenges new VCs face.
In this article, we provide 18 essential questions to ask a founder during an introductory call. These questions span various categories, including the startup, market, customer base, and fundraising details.
While these questions are tailored for introductory calls, they should evolve and become more specific as you delve deeper into due diligence.
These 18 questions will provide enough insight to decide whether to pitch the investment to your team and proceed with further diligence.
Let’s dive in!
1. What inspired you to start this company?
Understanding the founder's motivation provides insight into their passion and commitment. This question uncovers the personal and professional experiences that led them to this venture, offering a glimpse into their drive and long-term vision.
2. What problem are you solving and why is it important?
At the core of any successful startup is a significant problem it aims to solve. This question helps determine whether the founder has identified a real pain point and if their solution addresses a genuine market need. It's essential to understand the urgency and impact of the problem from the founder's perspective.
3. What is your unique value proposition?
Differentiation is key in a crowded marketplace. This question aims to uncover what sets the startup apart from its competitors. Whether it's a unique technology, business model, or customer experience, understanding their unique value proposition is vital for assessing potential success.
4. Can you walk me through your business model?
A clear and sustainable business model is fundamental for long-term viability. Ask the founder to explain how they plan to generate revenue, their pricing strategy, and any other monetization plans. This helps you gauge the financial health and scalability of the business.
5. What traction have you achieved so far?
Early signs of traction are critical indicators of a startup's potential. Ask about key milestones such as user growth, revenue, partnerships, or product launches. Traction demonstrates market validation and the founder’s ability to execute their vision.
6. What are your funding needs and how will you use the capital?
Understanding the startup's financial needs and capital allocation plans is crucial. Ask the founder to detail their current funding status, how much they’re seeking, and how they intend to use the funds. This information is essential for assessing whether the investment aligns with your criteria and for evaluating their financial planning and resource management.
7. What inspired you to start this company?
Understanding the founder's motivation provides insight into their passion and commitment. This question uncovers the personal and professional experiences that led them to this venture, offering a glimpse into their drive and long-term vision.
8. What are your biggest challenges and risks?
A founder's awareness of their challenges and risks reflects their strategic thinking and preparedness. Ask about the major obstacles they face and how they plan to mitigate them. This will give you insights into their problem-solving skills and resilience.
9. What unique insight do you have about the market that others might overlook?
Hearing about a founder's unique perspective is a great way to gauge their potential. This question helps you see how well they know their market and if they can spot opportunities that others might overlook.
10. How do you envision the landscape of your industry changing in the next five years?
This question checks how forward-thinking the founder is. It's important to see if they have a long-term vision and can anticipate future trends and changes in their industry.
11. What was the biggest pivot you’ve made so far, and what did you learn from it?
Pivots happen a lot in startups, and this question shows how adaptable the founder is and how they learn from experience. Understanding how they handle big changes can give you a sense of their resilience and decision-making abilities.
12. How do you prioritize features and developments on your product roadmap?
This question looks into the founder’s ability to plan and prioritize. It's important to see how they balance short-term needs with long-term goals and customer feedback with innovation.
13. What is your biggest customer success story so far?
Success stories show the real-world impact and value of the product. This question gives the founder a chance to highlight concrete results and happy customers, which can be strong indicators of product-market fit.
14. Who is your target customer and how do you reach them?
Identifying and understanding the target market is crucial. Ask the founder to describe their ideal customer profile, including demographics, behaviors, and pain points. This will help you evaluate if they have a clear and focused market strategy and how effectively they can reach and serve their audience.
15. What metrics do you track most closely, and why?
Metrics are crucial for measuring progress and success. Understanding which metrics the founder prioritizes can give you insights into their strategic focus and how they measure their business's health and growth.
16. How do you handle competition from established players and potential new entrants?
Competitive strategy is vital for a startup’s survival and growth. This question helps you understand the founder’s approach to competition, including their defensive and offensive strategies.
17. Tell me about your team.
A strong, cohesive team is often the backbone of a successful startup. Inquire about the backgrounds, expertise, and roles of key team members. Understanding the team dynamics and their combined skills can help you gauge their ability to drive the business forward.
18. What keeps you up at night about your business?
This question gets to the heart of the founder’s concerns and challenges. It’s a way to understand their biggest fears and obstacles, which can reveal their level of realism and preparedness.
Remember: The Quality of Your Questions Matters
These 18 questions are designed to provide a deeper, more nuanced understanding of the startup and its founder during your introductory call. They cover essential aspects such as market insight, strategic thinking, adaptability, prioritization, and customer success, while also probing into the founder's vision, competitive strategy, and personal concerns.
By asking any of these questions, you’ll gather valuable information to help you decide whether to pitch the investment to your team and proceed with further diligence.
Remember, the quality of your questions can significantly impact the insights you gain and the rapport you build with the founder.
Interested in the full research paper?
Join to receive Venture Capital research, guides, models, career tips, and many other great insights delivered straight to your inbox.
