Select Page

You’re finally in your first meeting with a potential investor. You’ve done your due diligence, your pitch went well, and now come the questions from investors. Know this: investors don’t hold back.

Investors need to be convinced by your startup, but they also need to be convinced by you. Fumbling under the pressure of a tough question is not going to convince anyone, so be prepared for them. We have compiled some of the toughest questions from investors for you, make sure you have an answer ready for these.

1. What is the least amount of money with which you can make it work?

Answering this question is a matter of balance; going too high is greedy, and investors will spot that immediately, but go too low and you may start overpromising the bang per buck of your startup. Our advice is to start low, but make it clear this means compromising essential parts of the business plan. “€X,- would be our absolute minimum to achieve the goals we set out, but it would mean compromising our rollout strategy, which we feel is essential to reach long term goals.” This way you start with a low number, but show that you have reason to ask for more.

2. What does your competitor need to do to shut you down?

This is a rough question that requires an honest answer. Snapchat has struggled with this for years. They are great innovators, but any new feature is copied by Instagram within weeks. To convince an investor that you are safe from this, you will need to pull out all the stops. Show how much work your competitor would need to do if they started today, and include a timeline. Explain in what way your team is qualified to not just keep the competitor behind, but how you will outpace them. There are no tricks here, just good prep work and an even better plan.

3. Can you give an example of a company you want to be like?

This question may seem simple on the surface, but it tells an investor a lot about the way you think, and where you want to go. When you decide on a company, whether it is Uber, Tesla, or Microsoft, give good reasons for that choice. Talk about the similarities in business model, marketing strategy, or envisioned growth trajectory. And no matter what you do, never say that you will be unlike any company that came before, this will tell an investor all they need to know about how your head is in the clouds.

4. What makes your team more qualified than others to run this startup?

This question can feel a bit accusatory, but it really is a valuable opportunity for you to brag a bit. Your pitch should have already introduced your team, so use this moment to underline some strengths. Do you have unique expertise? Prior experience in this industry? Have you earned your stripes academically? Put it out there, sell yourselves.

5. What changes have you made based on feedback that you’ve gotten?

When you go to pitch your startup, make sure that you have exposed it to some outsiders. Whether those are early adopter customers or experts in the field will depend on your startup. Having an answer ready for this question shows that you are open to outside voices, always looking to improve, and can be critical of your own work. These are virtues any investor will want to see.

Being prepared for these tough questions from investors will keep you in control. A good startup can still be pitched badly if you don’t come prepared. It takes a convincing pitch, due diligence, and a bit of quick wit to sell your ideas. All of these things can be made a lot easier than they seem, and you don’t have to pay thousands of dollars to have it be done right. Check out our list of 111 questions you will be asked by investors, which you get along with our pitch deck blueprint, and all the tools you need to be prepared for your first investor meeting.