The document provides guidance for entrepreneurs on how to effectively negotiate with investors by anticipating tough questions. It emphasizes the importance of being specific about the company's unique qualities, understanding weaknesses, and preparing financial data to support the pitch. Additionally, it advises on having a clear valuation and cautions against seeking venture capital without prior traction.

1. VCs Might Ask You
The 10 Toughest Questions

2. Investors are a different
breed of business people.
Equipped with deep funds
and intuition, they make the
riskiest decisions to help
businesses grow.
If you can think like an
investor, you are ready to
negotiate with one.

3. Savvy investors know a good
bet when they see it. To
determine if your company is
ready for investment, they may
ask you tough questions
It’s your job to be
prepared.
These slides will help better
prepare you for the toughest
inquisitions

4. NEED HELP WITH
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5. What makes
your
company
unique?
1
Be straightforward and
specific. Investors have
heard that products “save
money and time” too many
times.
It is better to have a narrow
description of your company,
rather than a vague one.

6. What is your weak spot?
Before your VC meetings, make sure to become experts at answering
these “gotcha” questions.
Stick to the truth. Savvy investors
understand that every company has a
weakness at every stage, and will poke until
they find a hole.
2

7. Why should we invest?
You have to be a domain expert to
determine whether your company is
worth investing in.
3
You need to convince investors to believe in you.

8. Why hasn’t this worked
before?
Understand why competitors have failed
in the past. And then use that analysis to
evaluate how you will succeed.
4

9. What do we need to know about
your company?5
Use data and numbers so that it sticks in your investors’
heads. Pick four or five numbers that are specific to your
company.
Ex: We have grown
revenues 140% in
the last two years.
We have also
helped over 1,500
clients.

10. What is your
company’s valuation?
It is important to have a
valuation prepared.
If the price isn’t set, then investors may
push you to a price. Avoid doing so.
6

11. Prove that your company is a good bet for investors. This means
that your total addressable market (TAM) needs to be big.
Show how much of that is the serviceable available market (SAM)
and finish with the serviceable obtainable market (SOM).
How big is your market?
7

12. This is not a fit for us. Would
you like an introduction to
[blank] VC firm?
This may seem like a good route. But
most likely, it is a dead end. If an investor
passes on your offer, they will tell other
investors why they did.
Politely accept and move forward with the
introduction. Just be wary that it may not
lead to a productive outcome.
8

13. Why haven’t
you gotten
traction?
9
Do not approach VCs until
you have achieved
traction. Venture capital
should be looked at as an
accelerator for existing
success, not a runway
extender to get it right.

14. How much are you raising?
Underestimate how much you want. If you’d like to raise $5 million,
start by asking for $2 million.
10

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