ChatGPT is not funny. I have to write all my #momjokes from scratch.

But it IS really good at generating lists of common investor questions!

These are great questions that I got from using this prompt (also mentioned here):

I am building a startup to automate video production. I am fundraising to raise a seed round. What questions will investors ask me?

As you’re prepping for Q&A (because you know how important it is!!!), these questions are a great starting place.

But what’s a good answer? What do investors care about?

I’ve added some color commentary (literally — my comments are highlighted with a green quote indicator) to give context and helpful hints!

🔮 Vision & Problem

• What problem are you solving, and why is it important?

Is it a big market? Investors love (and require!) big markets

• Why now? What has changed in the market or technology that makes this possible?

Something needs to be different. “No one had thought of it yet” is not a good answer. Likely means that it’s not a big enough problem to solve.

• Who is your ideal customer? How painful is this problem for them?

How painful → put this in terms of $ or metrics!

• How is this currently being solved today (incumbents, manual methods, etc.)?

Your product is ideally 10x better. People (me included) are lazy and don’t make changes unless something is WAY better.

• What’s your long-term vision—what does the world look like if you succeed?

It’s hard but important to thread the needle between great long term vision but starting small with a niche/wedge to be successful. You can’t be all things to all people on Day 1 (or ever!).

🛠 Product

• What exactly does your product do? Can you show me a demo?

Sometimes it’s genuinely hard to understand what the product is/does. Make sure this is clear in your deck without getting into the weeds.

Founders almost always want to demo the product as soon as possible. It’s their baby. “Look at how cute my baby is.”

Most investors want high level info first. They want to confirm the market, traction, and authentic demand. Demo is more of a follow up/due diligence item.

• What is unique or defensible about your product or tech?

Some investors care about this A LOT. Definitely makes sense in things like med devices, science breakthroughs, etc.

For software companies, we haven’t seen patents or such be that important. Executing well in a fast growing market is key. Other people will also have the idea.

Building a great culture that treats employees and customers well, while being smart about cash, can help you outlast a lot of competitors.

• How is your product different from existing tools like Descript, Runway, Pictory, or Synthesia?

I love it when a founder knows their competitors well. An answer like, “There’s no one like us in the space” is not good. WHY is there no one like you? Because the market is too small? The best answer is usually something like, “Here’s what others are doing. We agree with XYZ, we think we do ABC better, and we are focused on being the best at 123.” I’d also highlight that it’s a big market and competition is good since there are multiple winners in big markets.

• What is your roadmap over the next 12–18 months?

Do you know what your customers want? Do you have a plan? Does the plan make sense? This question is both a check to see if the founder has actually thought about how to deploy the capital they are raising, and to make sure they are thinking about product strategically.

Tips on what to build here.

BEWARE: some founders (especially technical ones) get too into “The Product” and how fun it is to build, and lose sight of the customer needs, pain, and budget.

• What key automation features are you building (e.g., script-to-video, AI editing, avatar generation)?

I don’t know what this question is about other than — are you building something that is 10x better, solves a problem, and is not easy to have a human do?

📈 Traction & Metrics

• What traction have you achieved to date (revenue, users, pilots)?

Talk about money early and often!!! If you don’t talk about revenue, I think you don’t have any.

And if you don’t have any revenue, here are some tips.

• Who are your current users or customers?

I like a variation of this — tell me about your best customer. What was the sales process like, why did they buy, how are they using right now? If you get a broad question like this, I’d try to tell stories about specific customers and wins instead of answering it generally.

• What are your engagement or usage metrics (e.g., videos created per user, churn)?

I like to ask about a specific customer who churned or deal that was lost and why. I want the founder to give me a real answer, showing they know their weak spots and what they need to be diligent about improving.

• What customer feedback or testimonials have you gathered?

Customer stories!!! Have specifics. Use data and names as much as you can.

• What’s your GTM strategy—how are you acquiring users today?

Did you get deals through previous relationships? (Not ideal but necessary early on.) Are you running a B2B playbook (BDR, AE, etc) or doing Product Led Growth? Having overall data is great but you can also talk about a specific deal to explain “typical” sales win.

📊 Market & Opportunity

• What is the size of the market (TAM/SAM/SOM)?

Full rant here. TL;DR — make it realistic (and big!)

• Is this a niche or a category-defining company? Why?

Category-defining is great because it means BIG. But it can also mean expensive. Educating the market, lots of testing, high legal costs (think: Uber fighting the taxi industry).

Niche can be a great starting place as long as there’s a path to growth over time.

Niche forever? Might be great business but likely not venture scale. Figure out a different path for funding the company…like having customers pay you!

• Who are your biggest competitors—and why are you different or better?

Know your competitors and be clear on what your strengths are. A good, thoughtful analysis here is impressive.

• How do you expand over time (e.g., adjacent markets, enterprise use cases)?

Even if it’s pie in the sky, have at least an IDEA of what you will do after you win with your first product or market segment.

Remember: billion dollar companies!!!!

💸 Business Model & Economics

• How do you make money (pricing model, freemium, SaaS, per video)?

You’d be shocked at how many pitch decks I see that don’t answer this question.

If you don’t talk about your business model…you are signaling that you don’t care about or understand how to make money!!

• What’s your ACV / LTV / CAC (or your estimates)?

If these numbers are not good — you should be looking at it way harder than an investor! If it takes a ton of money to get a customer and they don’t pay you much…red flag about the long term viability of your business!!

Early on, you may not be tracking this regularly but it’s worth it to calculate these monthly or quarterly. Leading indicators of business health!

• How scalable is your solution, and what drives margin improvement over time?

Very important especially in non-software businesses like hardware or CPG. Software margins are usually pretty good. If they’re not…figure out why not quickly!

• Do you have examples of paying customers or pilot conversions?

If you don’t put your revenue in your pitch deck, I assume you don’t have any. Regardless of the typical “advice” given for slide deck order…if you have customers and revenue, talk about that early and often!

👥 Team

• Why are you the right team to build this?

Don’t be humble. Inspiration here. Reminder: project confidence in your body language also!

• What’s your team’s background? Who’s technical, who’s product, who’s GTM?

Investors want to make sure that someone can build, someone can sell, and there’s an adult or two in the room.

Having *lots* of big name advisors, that’s usually a turnoff/warning sign. It’s good to have 2-3. But having 20 is a distraction and raises the question, why do you need so much help?

• Who are your key hires over the next 12 months?

Important to have a rough hiring plan (how are you spending the investment dollars), including self-awareness on team’s strengths and weaknesses.

Also, see if an investor can be helpful on these key hires! “Who do you know in your network?” or “What skill set would you optimize for at our stage?” can be good questions to ask an investor.

💰 Fundraising & Use of Funds

• How much are you raising, and at what valuation?

Reminder on valuation math: the amount you’re raising implies a 5-7x valuation of that number.

If you’re not getting any interest from investors who would be a good fit for you, it’s possible your valuation is high.

It’s normal for a founder to be optimistic or read the news and expect a big number.

• What milestones will this round help you reach?

Revenue and customer numbers!

• How will you allocate the capital (team, product, GTM, infrastructure)?

Raising money should let you pour fuel on the fire, not keep the lights on or add more back office folks. Most investors like to see money spent on adding more sales and marketing firepower or building product faster to get more customers. You’ll naturally need some operations people too but don’t emphasize that.

If you’re raising money so that you as the founder can go full time on your business, I’d make the salary $100k or less. Any more than that and it feels like you don’t “get” a startup. Scrappy at first, creating massive value over time. If you want/need to make a high base salary asap, might not be the right time for a startup!

• What does your next round look like—when, how much, and what needs to be true to get there?

Where do you go from here? If you raise too much or have a very high valuation, it can be hard to “grow into” your next round. Back of napkin math says you want to double your valuation each round. What revenue $ and grow rate needs to be true for that next valuation? Can you get there with this raise $ and your (REALISTIC) financial model?

🧠 Bonus / Curveballs

• What’s the biggest risk to this business?

If you don’t know the risks, you’re either lying or an idiot. Sorry, was that too harsh?

A thoughtful answer to this is really compelling. It’s possible the investor has already brought it the top risk. Turn this question around to show how you overcome the risk. You can also ask the investor what they’ve seen from other business or what *they* see as the biggest risk!

Most founders constantly worry about all the ways their company can die while simultaneously being incredibly optimistic. Reminds me of Warren Buffet’s rule #1 — Never Lose Money.

• What’s the most surprising thing you’ve learned so far?

Gotta be learning and improving. Gotta be open to being wrong. If you haven’t been surprised, you’re not paying attention!

• If a big tech company wanted to kill you, how would they do it?

Have an answer but also explain why it’s unlikely. 😉 e.g. “Stripe could launch XYZ but they’re focused on ABC.” Or “Salesforce could acquired our competitor but they will quickly move up market and raise prices while we focus on customers, speed, and SMB.”

(P.S. A F500 company acquiring your competitor is not a death sentence. Lots of examples where non-acquired companies still thrived.)

• Why do users love your product? What would make them leave?

Hopefully you have already talked about your customers loving you 100x before an investor has to ask you this question. 😂

In terms of what would make them leave? It’s usually poor execution by the startup. Maybe you have a better answer but once they are a customer, that’s your deal to lose!

Your Turn

Okay, founders and investors, what’s your unhinged commentary on these questions? Would you add anything? Disagree with anything? What other questions have you gotten? Add to the brain dump below!