10 questions to ask your investor during a pitch meeting
10 questions to ask your investor during a pitch meeting
In this series of blogs, we’re outlining some of the ways you can make the best-possible start when it comes to seeking early-stage funding. For founders, the first pitch meeting can be nerve-racking. And understandably so! Investors aren’t just looking out for your world-changing solution – they’re also sizing you up.
If you’re having a meeting, that means the investor has almost certainly already seen your deck, and now they want to dig in a little deeper. Typically, these meetings run to between 30 and 45 minutes – and time really does fly. At the end of the discussion, when you’ve pitched your business and made an inarguable case for funding, there’s usually a spare 5 minutes or so, when founders turn things around and ask investors questions. If the half hour pitch felt like it went quickly, these five minutes really disappear. But the time is prime real estate, and offers a really valuable opportunity not just to get critical information from prospective investors, but to leave a great – and lasting – impression. Over the years, I’ve reviewed thousands of decks, spoken to hundreds of founders, and made tens of investments. During those meetings some founder questions have really stood out: they’ve piqued my curiosity, or got me thinking. I wanted to share the 10 best of them here, so that you’ve got the best-possible advantage when it comes to maximising the returns on those precious five minutes. I’ve also highlighted a few things to look out for in the investor responses, and what they might indicate.
Q1. So, what do you think about what we are building?
Keeping this deliberately open ended allows you to gauge initial high-level sentiment.
Q2. What is it about our pitch deck that excited you? Follow up: Is there any area of concern from our pitch that might be an orange/red flag as you consider us for investment?
It’s always useful to hear where your pitch is scoring high – and where it stands to be improved. If the investors do highlight an area of concern, follow up with more data/ proof points/rationale in an email/data room/ notion page
Q3. How have you adjusted your requirements since the market downturn, and what do you now pay particularly close attention to?
A lot of investors, even at pre-seed, now focus on runway, traction and how a recessionary climate stands to impact the target customer segment.
Q4. What is the investment process, and who is on the investment committee (IC)?
Ideally the person you’re speaking to is the decision maker. If they’re not, make sure you still give them enough info to properly represent you as an opportunity – and go to battle for you.
Q5: How long does it typically take from first meeting to making the investment decision?
The answer here is usually, “it depends”, but the more specific number of days/months for example, the better. Press for a number, or range if possible.
Q6: Beyond investment, what does support for your portfolio companies look like? For example, what was your most recent effort at supporting one of your portfolio companies?
This is a really important one. Your world-changing idea may well have more than one investor interested, and it’s vital to know what the differentiators between what they offer are. At Octopus Ventures, for example, we put people at the heart of everything we do. That’s why our portfolio companies enjoy access to our dedicated People and Talent team. Drawn from a global pool of experienced operators, they’re perfectly placed to offer invaluable advice on how to attract, retain and manage the best-in-class talent you need to help your business scale.
Q7. How often do you invest, and when did you make your last investment?
You want to be sure investors are actively deploying, in order to manage your time – and expectations. If they’ve effected a slow or a pause on deployment, this might mean investors are much more conservative, which carries implications for how you should decide to spend your time, and where.
Q8. How much of the fund have you deployed so far, and how much is left? Do you have a follow-on strategy?
At the start of a brand new fund, investors might be a little risk averse. It’s the same at the end. Consider signalling risk and potentially ask how it is managed for investors who follow on.
Q9. Who are your LPs (limited partners), and do you often co-invest with any of them?
This is a useful way of finding out the investor’s source of capital. It’s not uncommon to find that LPs are co-investing alongside GPs.
Q10. What types of investments are you personally excited by?
This is a great way to open up the discussion and get to know the investor you’re talking to a little better. Most investors have a reason they started doing what they’re doing: taking a personal interest will help to develop a rapport and find common ground – especially in mission-driven sectors.
This is by no means an exhaustive list, but a few of these questions should get the conversation going – and help you start building a relationship with someone who could well turn out to be all-important to the growth of your business. It is important to add that prior to speaking with an investor, ideally, you’d have done your research to understand the basics; their industry, stage, geo fit, some of their portfolio companies (and if any is competing) and potentially what they do not invest in.
See more from the pre-seed team in our series of blogs below, on the best way to approach early-stage fundraising – and keep an eye out for new ones. In our next, we’ll explore some of the most common reasons for investors to say no.