We know how important it is to have the right investors backing your company. Not only do they provide the necessary funding, but they can also offer valuable guidance or connections to help your business succeed. However, finding the perfect investor can be a daunting task. That's why we're trying to provide a comprehensive guide on what to ask potential investors at each stage of the meeting process. We'll cover everything from the basics of their investment thesis to more detailed questions on their support for portfolio companies. So, grab a notebook and let's get started on finding the investor that's the perfect fit for your startup!

Source: Symanto

Checking the Fit

Before you meet with your potential investor, consider finding out the following from their website or news, or even asking them:

What sectors do they invest in? Most investors now write their thesis on their websites or social media.

What round sizes and stages do they invest in?

How many investments have they made in the last year? - Can be found usually in press releases, or 'why we invested/our investment in..'

First Meeting Questions

When preparing for your first meeting, consider asking:

How large is the fund and how much of their fund do they reserve for follow-ons? Some investors have published fund theses during their fundraising press releases

Do they lead or follow?

What is their view on this space? Can check their blogs on market landscapes, thesis etc.

Follow-up Meeting Questions

If the first meeting goes well, follow up with:

How do they work with portfolio companies? Ask for specific examples

Who would be on the board and how many board seats/observers do they expect?

What kind of return or exit valuation do they expect from your investment?

Where does their money come from and who are their LPs?

How do they decide which companies to follow on with? Are there examples where they have not followed on?

Do they do bridge rounds?

Conducting Reference Calls

Conducting reference calls can help you get a better feel for what it’s like to work with a potential investor. Here are some questions to ask during your reference calls:

What is working with [prospective investor name] like?

How often do you speak to them?

Do they ever feel they are not able to contribute to you because of their other board seats/many investments?

What are some examples of things that they have done to add value?

What has been a difficult time, and how did they react or support you?

Did they follow on in your later rounds or support in any bridge rounds?

What is one thing you have disagreed on?

If something dramatic happens, who would you call first from your investors? And who would expect to be most helpful?

Rate the investor on a scale of 1-10.

Asking Co-investors for References

Asking co-investors for references may seem like overkill, but remember that you will be tied to your investor for years. Here are some questions to ask:

Have you invested with them? Do you rate them, and would you take money from them?

Did they support the company?

In areas of disagreement were they reasonable and constructive or difficult and uncommunicative?

Making the Right Choice

Once you have gathered all the necessary information, it’s time to make your decision. Remember to consider all the different perspectives you have gained and choose the investor that aligns best with your goals and values.