5 Top Questions VCs May Ask Startups

Venture Capitals are like parents to a startup. Just like parents who ask their children a bunch of tough questions before they invest their money in their dream college or career. Similarly, a startup seeking investment from a Venture Capital needs to be well prepared for all the tough questions that can bowled at them at them at any point of time. In order to prepare every new entrepreneur with this test of life, we at Indianweb2.com, have prepared a list of five questions that one must be well prepared with before going for that big meeting.

1) Future Plans -

Every Venture Capital wants to know if you have a future plan in place for your startup. Your future plans depict yours vision for the startup and your expectations from it. They might ask you a tricky question like, if you're in the market for a long haul or you’re just waiting for a lucrative buyout after building it. So, answer with all your wit. They might also want to know your rough strategic plan for the company. So, study and prepare well.

2) Where are you currently positioned in your fundraising process?

This one is a toughie. Here, the Venture capitalists are trying to assess their importance in your life. They might ask you, how many other investors are you in talks with and where do they as investors stand in your priority list. Answer this question with all your honesty and don't try to dodge the bullet as these are trained professionals who are well versed with the ability to read in between the lines.

3) Tell us about the team -

Here the keywords that they want to hear fall out of your mouth and straight into their ears are "focused", "committed ", and "from a long time" etc. Every startup, no matter how brilliant the founder and the basic idea is, wants a team of well qualified and enthusiastic team to function properly and prosper. A VC looking to invest really wants to know if your team is ready and committed to give them their moneys worth.

4) Your views and plans for the competitors -

Here don't act like you're the best in the market and no one is even near you. Confidence is good. Overconfidence is not. When asked about your competitors and your plans to handle the competition, try being honest and explain the VCs what makes your XYZ Company better and different than the ABC company. Here, try to show your passion and conviction towards your startup. This will surely get you the investment.

5) Valuations Expectations -

This one is a pretty tricky one. Be careful. Don't make the mistake of overvaluing or undervaluing your company. Avoid giving a specific figure and go for things like, "we will see what the market decides." This way you will able to maintain their curiosity and be safe from making the mistake of undervaluing your hard work. However, you yourself should be clear about your capital expectations.