Turning the Tables: Essential Questions Entrepreneurs Must Ask Investors

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Meetings with investors can be nerve racking. The entrepreneur often is preparing a pitch and worried about getting difficult questions. Let’s flip the script: I always like to ask entrepreneurs what questions they have for me. The answer of “I have no questions” is not a good one. There are many good questions, but here are a few of my favorites to ask investors during a meeting.

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What made you interested in taking this meeting? What gives you the most pause to invest?

I like both of these questions because as an entrepreneur you learn more about why they like your business, as well as what issues you may have to overcome in order to receive an investment. A good investor will answer directly. The level of thought into how they answer why they took the meeting also shows you how much effort they have put into prepping for the meeting.

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I see you invested in [portfolio company], how did they do [topic you want help with]?

Not only does this show your ability to research and prepare, you can get valuable feedback on a topic (i.e. marketing, sales, product) based on their specific experiences with a company versus generic advice.

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What is your investment process?

This is a great way to understand the investor’s process and next steps. You can learn how many and what type of meetings it takes, who makes decisions, what type of due diligence is required, what terms they generally invest with, where they are in the fund life cycle, how they handle follow-on investments, etc.

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Can you tell me about a recent investment that was successful and why? One that did not work out and why?

I like this both for learning about why certain companies did/did not ultimately work out, but also how the investor talks about their role in the situation. Do they blame someone/something for the why, how friendly (or not) did it end, and what specific areas were they supportive to the founder.

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I often get questions about check size, vertical, geo focus, etc. Those are fine questions, but most firms have that on their website. A better way would be to confirm what you read on their site (which shows you do research) and confirm it applies to your business. There are many other good and thoughtful questions - be prepared to ask those to investors in meetings. It can also be helpful to talk to founders who have previously worked with the firm to understand their experience. Remember you are equally deciding if the investor is someone you want to work with for the coming years!