Entrepreneurs look up to investors because they have deep pockets . Most founders are young and naive enough to believe that having money must mean that funders are smart. This is why they pepper them with questions when pitching to them. Do you think our idea is any good? Will our business model wor? These are generic questions which attract superficial answers.
The smartest question an entrepreneur can ask an investor is: “Can you tell me what’s wrong with my idea?”
Why This Question Matters
This will force the investor to engage with you! He will challenge your assumptions, and this will help prevent you from wasting valuable time and money in making rookie errors.
Even better, if he provides you with useful insights which you can incorporate in your model, he is much more likely to fund you. Since he has invested intellectually in your business plan and helped you to tweak it, he is much more likely to invest financially as well – because he will start thinking of himself as being a part-owner in your company.
[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]