What You Should Ask Founders Before Investing in Their Startups?
After spending a couple of years as an entrepreneur and founder, I can safely say that the best startups are not born by chance. They result from a lot of hard work, dedication, and sacrifice.
I’ve been lucky enough to meet some incredible entrepreneurs and startups over the years, which have taught me many lessons about what it takes to build a successful startup.
In this article, I’ll share with you some questions that I recommend asking your potential startup founders to find out whether they are really serious about building their company or if they just want your money.
1. Can You Come Up With A Pitch For Your Product?
Most startups fail because they cannot develop a product before building their business around it.
Founders that don’t have an idea or an understanding of what their product is can never develop it into something useful and useful for the market.
Before you invest in someone’s startup, you should always ask them if they know what their product is going to be or how it will help people solve problems in their life.
The best founders will always have a clear vision of what they want to build, but sometimes this can be difficult for people who are just starting.
2. What Is Your Company’s Financial Plan?
This is another one of the most important questions you should ask any startup founder before investing in their company.
Many people think startups can just start building and start making money, but that’s not how it works. Successful startups need to have a solid financial plan before they even start.
Most startups fail because they cannot make enough money to survive while they build their product or service.
So if you are considering investing in a startup, it’s always a good idea to find out how much they have budgeted for marketing, sales, and expenses before you decide whether to invest in them.
3. How Many People Are On Your Team?
A lot of startups try to build a big team when they are first starting, but this is usually one of the first things that will cause them problems down the road as well as when trying to raise funding for their business later on.
Many startups fail because their team has too many people on it, which means there are too many conflicting opinions and ideas being presented by different people at the same time.
The best startups will always be a small team of 2–4 people that are working closely together to make sure they all have the same vision and goals.
4. What Is Your Product Development Plan?
Most startups fail because they build something that no one wants or needs. You can have the best product in the world, but if it’s not useful for people, then no one will buy it or use it.
So when you are first starting, make sure you are developing a product that people will want to use and not just an idea that you think might be good for your business.
The best founders always know exactly what their product is going to be like before they build it.
So, if you are considering investing in a startup, make sure you ask them what their plan is for building their product before you decide whether to invest in them.
5. Do You Have A Product Roadmap?
A lot of entrepreneurs and startups don’t have a plan to develop their products and services because they just start building with no kind of direction.
I think this is one of the most common mistakes startups make because if you don’t have a coherent plan for what you are building, then you will end up building something that no one wants or needs.
So if you are considering investing in a startup, make sure they have a roadmap for what they are going to build before you decide whether to invest in them.
6. How Much Money Do You Need To Raise?
One of the biggest mistakes that startups make is that they try to raise too much money when they first start.
There is nothing wrong with raising money if it’s needed and if the business is making money, but if you don’t have a product or service that people want to buy, then no one will invest in your company.
7. How Are You Preparing For The Future?
One of the most important things that startups need to do before they can start building their business is to prepare for the future.
They need to have a plan for what they are going to do in the future.
This is one of the biggest mistakes that startups make because they never have a plan for what they are going to do in the future and as a result, they end up having a lot of problems down the road.
So if you are considering investing in a startup, make sure you ask them how they plan on growing their business and how much money they need before you decide whether to invest in them.
8. What Is Your Marketing Strategy?
The best startups always have a clear marketing strategy for what kind of content and messages they want to use online and offline in promoting their products or services.
Many people think that social media marketing is enough in promoting your product or service, but this is rarely enough these days.
There are so many platforms out there now where people can advertise products and services these days, so you need a excellent strategy if you want your startup to prosper.
Final Thought
I’ve learned a lot of lessons about what it takes to build a successful startup over the years, but one of the most important things I’ve learned is that startups need to have a clear vision and a solid plan for what they are going to do.
So if you are considering investing in a startup, make sure you ask them how they plan on growing their business and how much money they need before you decide whether to invest in them.
About the Author
I hope that my post has helped you know more about Startups. Feel free to leave a comment and tag me and I will answer them. Follow my profile to get the latest content I post to stay ahead of the curve.
I am the Founder of Cudy Technologies, a full-stack EdTech startup helping teachers and students learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces, and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
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