Raising funds is not an easy process, but finding the right investing partner to help you build your company is much more difficult. When it comes to fundraising, investors ask startups 100s questions not just during their pitch or till the funding is complete but even after they have invested the company. Investors are choosy about where they want to put in their money, but what about entrepreneurs? With rise of startup investments, there has been rise of number of investors and investment firms. Thus, an entrepreneur needs to be careful who they allow to invest in their startup.
Although this is not an exhaustive list of questions that you need to ask, but the basic considerations that should be kept in mind before you decide on a VC to invest in your business.
So, here’s a list of questions you should keep in mind
About The Fund
Founders should be aware about the basic profile of the fund. It’s better to ask them about the current number of investments that have been made through the fund.
Also, what is the experience of the partners in terms of the sectors they have worked in is important. In case they are from the same sector as your business then you will have a better chance of gaining useful insights from them.
Apart from this it is essential to know what pension funds and other funds have invested in the VC’s fund? What is the value of total funds invested by the management? The number of investments that have been made till-date by the management. Another essential factor is to enquire if there are geographic limitations to the investments that are being done. Because, getting funding from a VC is a long-term venture.