Venture capitalists have a hard job. The good ones have to pick a small
number of investments from a large pool of opportunities, often with minimal
If I were a VC, I'd look at a lot of the things that VCs look at today and
ask some of the same questions. What's the market opportunity? Who's on the
team? What do you think your sustainable competitive advantage is, or
In addition to some of these common questions, I'd also ask some uncommon
ones. I think it's these uncommon questions that often reveal the heart and
soul of a startup. If I were investing my own money (which I do on occasion),
the answers to these uncommon questions would be as important to me as some of
the common ones.
Uncommon Questions For A Startup
1. What is the longest debate the team has had in the last 30 days?
How long did it last? What did you decide? How did you decide it?
Motivation: Any great startup team is going to have a set of issues/questions
at any given time to which the answer is not obvious. How a team goes about
identifying the tradeoffs and getting to an answer (even if it's not the right
one) is revealing.
2. If your equity/salary was based completely on the accuracy of
your projections, what would your forecast be?
Motivation: Drawing the classic "hockey stick curve" (for users, traffic,
revenue, profits, whatever) is just too easy and doesn't tell me anything. I'd
like to know what the startup really thinks it's going to do. Yes, all
forecasts are guesses, but some guesses are more practical than others.
3. What's the biggest surprise you've had in the business
Motivation: There should always be surprises. Startups should be
experimenting and trying new things constantly. Especially in the early days
when lessons are the cheapest. No startup has it "all figured out" (and those
that do, aren't experimenting enough).
4. If you knew with 100% certainty that you weren't going to be able
to raise (more) funding, what would you do?
Motivation: Sure, it's good for startup teams to think about how to break
beyond current limits to build phenomenal companies. But, great entrepreneurs
also work well within constraints that are unavoidable. The mother of all
constraints is a fundamental scarcity of resources -- like cash.
5. If you could pick only one non-financial metric to measure the
success of the business, what would it be?
Motivation: Revenues and profits are a great, fundamental way to measure a
business. But, looking at non-financial metrics can often be very revealing.
Shows what people care about.
6. If you could fix magically fix one, specific problem with the
business today what would it be? What would the likely impact
Motivation: All startups have problems. It's interesting to know what
problems a startup has and how fixing it might create another, non-linear
improvement in the business.
7. What will you do to find and retain the best people possible for
the company? What do you
Motivation: More than anything else, the quality of the early team will
likely influence the outcome. I'd like to know what uncommon things are going
to be done to draw in the uncommon talent.
If you were a venture capitalist and investing in startups, what uncommon
questions would you ask? If you've raised capital before, what's the
best question you've been asked by a VC?
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