Startups have unlocked a way for people to show their ability and to work for their passion. Everyone is interested in startups regardless of age or background, but with skills. You also need capital to turn your startup dream into something. But how can a young company raise funds for startups– the answer is venture capitalists. They are the perfect source to raise funds for startups. Venture capital are investors that invest in startups to help them with capital in the process of expanding; venture capitalists will help you to raise funds for startups because they see a return on investments in the future. Top venture capital firms will have meetings first to ensure they trust the startup, so planning for that interview beforehand will ensure that investors will help you raise funds for startups. Here are the Top eight questions that top venture capital firms ask.
8 Questions that Venture Capitalists ask
1. Can you give us a basic idea about your startup?
Everyone needs a basic idea about what they are investing in. Investors are putting their money and time into you and your startups, so talking about basics is the first thing to do. All the general overview of your startup comes into this section. How you present will let them know how honest you are about everything and if they see any return on investment in the future. Honesty creates trust between the startup and the inventor. The following questions are the basic questions you will get.
- What is your product and the whole company?
- When did your company start?
- What is the gross profit your startup has made?
- Is there any debt on the company?
2. Why do you think your product can win the market?
This question denotes the confidence and articulation of the speakers. If the venture capitalist is convinced that your product has the ability, they will think about the return of investment and would want to invest in the startup. Anticipate questions such as-
- How would you describe your startup?
- How does your idea help society?
- What is different about your product?
3. Can you tell us about your employees and team?
This will reflect the relationship between the boss and employee. How you will articulate will tell them about your team-building skills. If the employer has a good and understanding relationship with the employee, it will denote that you have management skills.
It will let them know about the number of people you work with and show your leadership skills. This will also tell them if the number of employees is enough.
4. What is your marketing tactic like?
Your marketing tactics show the aspirations you have. Your marketing tactics will tell them about your knowledge and where it needs work. The marketing you have tried earlier will show that you are interested in the prosperity of the startup.
Along with capital, a person also needs marketing skills, and when they know that you have the marketing knowledge, the investment return will seem more significant. The marketing tactics you will try in the future will talk about the end of your startup and if the investors can expect a return on investment.
5. Can you tell us about the competition in this business?
Every market field has competition, and when you honestly tell them about the competitors, it will show your credibility. The venture capitalist will also learn about the future they can expect and if they have a competitive edge. Expect questions such as.
- Who are your competitors?
- What makes you stand out in the competition?
- What are the advantages you have over other companies?
6. What are your goals?
The way you present them and your goals will show your passion and what you will do after you get the capital. If the capital are investing in you, they have the right to know what you will do with the investment. They want the maximum return on their investment, so tell them precisely about your goals and plans.
You can make a five-year plan and present it, it will give them a general idea about the business, and they want to relate with the speaker more, so if you can convince them, the investment may happen immediately.
7. Do you have the expected resources?
The venture capital wants to know how ready you are for the business, so they will ask questions about what resources you have and how much they have to invest in essential resources, expecting questions such as.
- Do you have the technology?
- What is the cost of the resources you need?
- Where are the places you can cut down the cost of resources?
Every business has some risks, so let them know about the dangers they can expect. It will also show you know about all the problems you might face. If you know the risks, you will also see the way you will encounter them if the problem persists so that they may ask questions like-
8. What are the risk factors in the market?
- Is there any legal issue?
- Are there any risks regarding the product?
- What kind of risks can you expect in the future?
The Final Words
Top venture capitalist firms have helped startups venture into significant businesses. As the number of startups has grown. The number of firms has also increased. There are around 70,762 startups in the USA, making it. Rank 1 in terms of the number of startups a country has, and India and the UK have second and third rank respectively. So to comprehend with that there are a lot of investors too. The venture capital will decide based on the interview you just prepared for. Before appearing for an interview. You also need access to the top venture capital firms. InvestorBase is one such platform that helps you find the top venture capital firms that might be interested to invest in your startup. So what are you waiting for? Check out this platform!