3 questions founders should be asking investors in Q1 2023

Share Story on

Investors and entrepreneurs began 2022 bright-eyed and optimistic as startups raised nearly $13 billion in the first quarter, making it the fifth-highest quarter for funding on record.

However, talk of a pullback in global venture capital has become louder and more widespread of late. It’s clear that the cash is not flowing as freely as it once was, and that has changed the landscape for ambitious startups looking to build and scale their propositions.

However, a challenging economic climate doesn’t necessarily mean that startups should accept the first offer that comes along, settle for lower valuations or bring on investors that have different values and ambitions for the business. It is now more important than ever for every party to approach the negotiating table with clear questions and expectations.

Here are three firm but fair questions that founders should consider asking their potential investors:

What value can you provide besides money?

It is important to remember that VCs don’t have an endless pot of money — they are at the mercy of their LPs’ liquidity.

Most investors worth their salt will demonstrate that they come with more than just deep pockets — value such as sector expertise, business experience or a global network. Founders should feel confident about proactively asking about what an investor can provide, particularly the networks and introductions potential investors can facilitate.

There is a significant difference between an introduction that was facilitated via an email and a clear handoff to someone whose relationship with the investor is deep and based on many levels of trust. Many investors pride themselves on having a robust and lucrative contact list, but not all introductions are the same — a LinkedIn profile rarely demonstrates the depth and quality of an investor’s network or knowledge.

My advice is to be clear about your commercial goals and push potential investors to offer names of individuals or organizations that will deliver the impact you’re looking for. For example, we recently introduced one of our portfolio companies to an $80 billion infrastructure firm with which we had developed deep relationships in order to set up pilots in a number of regions.

Introductions should not just forge connections; they should deliver tangible commercial impact.

How secure is your cash?

It always surprises me how many founders believe VCs are sitting on piles of cash that they are ready to distribute at any moment.

It is important to remember that VCs don’t have an endless pot of money — they are at the mercy of their LPs’ liquidity. It is therefore sensible (and necessary) to have answers to three key questions:

3 questions founders should be asking investors in Q1 2023 by Ram Iyer originally published on TechCrunch



Search By Category

Recent News

You May Also Like

MK Jewels brings the rich jewel culture of every state in India to one venue

MK Jewels brings the rich jewel culture of every state in India to one venue

MK Jewels New Delhi (India), February 3: MK Jewels proudly celebrates the diverse and rich craftsmanship of India with their “Proudly India” showcase on the

Social Commerce Platform-enabler, Springo joins #SucSEEDFamily

Social Commerce Platform-enabler, Springo joins #SucSEEDFamily

New Delhi (India), February 3: Springo, a community commerce enabler platform aimed at making the journeys of sellers selling on social media fast, efficient & easy

The Beauty Sailor; a premium skin care brand in India

The Beauty Sailor; a premium skin care brand in India

The Beauty Sailor, Premium Skincare and Haircare Brand in India New Delhi (India), February 3: The Beauty Sailor, an exclusive skincare brand in India, is preparing

Restore Your Smile with Dental Implants:  10 Best Dentists Debunks Some Myths about Implants

Restore Your Smile with Dental Implants:  10 Best Dentists Debunks Some Myths about Implants

New Delhi (India), February 2: Dr. Shikha Tripathi, BDS, MDS, Prosthodontist & Implanologist, Owner of My Family Dentist Dental Implant Center Multichain Dental Clinic & Founder

On This ‘WORLD CANCER DAY’: 8 Best Oncologists Share Their Advices on Increasing Risks of Cancer

On This ‘WORLD CANCER DAY’: 8 Best Oncologists Share Their Advices on Increasing Risks of Cancer

New Delhi (India), February 2: Dr. Nitin Singhal, Mch Surgical Oncology, (TATA Memorial), Laparoscopic Oncosurgery and HIPEC specialist, Practice in Ahmedabad World Cancer day raises awareness about

Union Budget 2023-24 has reshaped the landscape of capital investment in India: Prateek Toshniwal

Union Budget 2023-24 has reshaped the landscape of capital investment in India: Prateek Toshniwal

Surat (Gujarat) [India], February 2: Prateek Toshniwal, a renowned chartered accountant, has said that the Union Budget 2023-24 has reshaped the landscape of capital investment,