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Decoding Questions Investors
Might Ask You as a Startup.
Portfolio Fit.
Portfolio
Mix
Individual
Application
• Do phase and industry fit to the investment
strategy of the investor...
Strength of Application.
Portfolio
Mix
Individual
Application
• Is this better than other investment options
we as investo...
Elements to Consider.
Portfolio
Mix
Individual
Application
Market
Product
Team
Market Size.
Market
Product
Team
• Is the market big enough?
• How many buyers need it and could
realistically be reached ...
Example Question on Market from
Y Combinator Application.
Market
Product
Team
“How do or will you make money?
How much cou...
Product Value Added.
Market
Product
Team
• Would it make some people extremely
happy? Meaning: Can you sell this to early
...
Example Question on Product from
Y Combinator Application.
Market
Product
Team
“What is your company going to make?”
• Wou...
Fit of the Team.
Market
Product
Team
• Is this team in a better position to lead this
product to success than other teams ...
Example Question on Team from
Y Combinator Application.
Market
Product
Team “How long have the founders known one
another ...
Further Elements to Consider.
Portfolio
Mix
Individual
Application
Market
Product
Team
Can they
do it?
Want to
do it?
Cult...
Example Questions on Team from
Y Combinator Application.
Can they
do it?
Want to
do it?
Cultural
Fit
“Please tell us somet...
Example Questions on Team from
Y Combinator Application.
Can they
do it?
Past
Achievement
Good Thinking
“Please tell us ab...
Example Questions on Team from
Y Combinator Application.
Can they
do it?
Past
Achievement
Good Thinking
“How will you get ...
Comments, Corrections, Further
Questions?
W http://www.alexander-franz.at/en
T @AlexFranzAT
L https://at.linkedin.com/in/a...
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Decoding questions investors might ask you as a startup

Investors ask questions that might look trivial or even boring until you understand the background. This presentation helps you as a startup CEO or CFO to decode investor questions.

Decoding questions investors might ask you as a startup

  1. 1. Decoding Questions Investors Might Ask You as a Startup.
  2. 2. Portfolio Fit. Portfolio Mix Individual Application • Do phase and industry fit to the investment strategy of the investor? Meaning: Does it fit what the VC has promised to their limited partners, who provided the money the VC is investing? • Does it increase or decrease systemic risk of the portfolio (does it mean putting “all eggs in one basket”)? Meaning: Does it increase the risk of losing all investments? Example: If Apple decided to allow AdBlockers on iPhones, all players who rely on mobile advertising suffer a lot. It’s a systemic risk.
  3. 3. Strength of Application. Portfolio Mix Individual Application • Is this better than other investment options we as investors have? • Does this have the potential to earn back money that we will lose on other investments in our portfolio? Meaning: can this become really big?
  4. 4. Elements to Consider. Portfolio Mix Individual Application Market Product Team
  5. 5. Market Size. Market Product Team • Is the market big enough? • How many buyers need it and could realistically be reached through the distribution channels? • Which amount of money could they (budget) and would they (value for them) spend?
  6. 6. Example Question on Market from Y Combinator Application. Market Product Team “How do or will you make money? How much could you make?” • Is the market big enough? • How many buyers need it and could realistically be reached through the distribution channels? • Which amount of money could they (budget) and would they (value for them) spend?
  7. 7. Product Value Added. Market Product Team • Would it make some people extremely happy? Meaning: Can you sell this to early customers? • Does the happiness exceed the cost to produce it? Meaning: Will it make or lose money? • Is it a two-sided or multi-sided market? Any example for a two-sided market is a job platform, where you need both job seekers and companies with vacant positions. • If two-sided: Would it make both sides extremely happy?
  8. 8. Example Question on Product from Y Combinator Application. Market Product Team “What is your company going to make?” • Would it make some people extremely happy? Meaning: Can you sell this to early customers? • Does the happiness exceed the cost to produce it? Meaning: Will it make or lose money? • Is it a two-sided or multi-sided market? Any example for a two-sided market is a job platform, where you need both job seekers and companies with vacant positions. • If two-sided: Would it make both sides extremely happy?
  9. 9. Fit of the Team. Market Product Team • Is this team in a better position to lead this product to success than other teams that might work on similar ideas? • Can they cover all roles needed, from building the product to selling it? • Will the be able to grow this company together for the next two or three years, and overcome obstacles?
  10. 10. Example Question on Team from Y Combinator Application. Market Product Team “How long have the founders known one another and how did you meet? Have any of the founders not met in person?” • Is this team in a better position to lead this product to success than other teams that might work on similar ideas? • Can they cover all roles needed, from building the product to selling it? • Will the be able to grow this company together for the next two or three years, and overcome obstacles?
  11. 11. Further Elements to Consider. Portfolio Mix Individual Application Market Product Team Can they do it? Want to do it? Cultural Fit
  12. 12. Example Questions on Team from Y Combinator Application. Can they do it? Want to do it? Cultural Fit “Please tell us something surprising or amusing that one of you has discovered.” “Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you're making?” “If you've already started working on it, how long have you been working and how many lines of code (if applicable) have you written?”
  13. 13. Example Questions on Team from Y Combinator Application. Can they do it? Past Achievement Good Thinking “Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together. Include urls if possible.”
  14. 14. Example Questions on Team from Y Combinator Application. Can they do it? Past Achievement Good Thinking “How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won't be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?”
  15. 15. Comments, Corrections, Further Questions? W http://www.alexander-franz.at/en T @AlexFranzAT L https://at.linkedin.com/in/alexanderfranz X https://www.xing.com/profile/Alexander_Franz

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