What I often see are (tech) founders who know perfectly well how much developers and server parks they need, but not how to open up new markets. Of course you need to have a product that works, but a market entry plan is the next thing.
Love this clarity āTheyāre trying to gauge whether your connection to the problem is deep enough to survive the inevitable pain of scaling a company. They want to see that this isnāt just an opportunity ā itās a missionāā¦.
If the deal is hot, investors who ask too many questions will just lose from my experience. Hot deals are made within hours...so not much time for back and forth.
Sorry my long reply ended up under Mels comment below/in the feed. I can cut and paste here. It's a great point you make and I've expanded on it - but it's in replies under Mels comment!
"Can this founder be trusted to use my money wisely?" - spot on. And that 75% of that spend is on talent. A founder needs strong IQ & EQ to bring in the right builders & scalers.
@chris, I feel most founders underestimate how much the Q&A exposes the way they think, not just what they know.
The moment you realise investors are evaluating your decision-making under pressure, not your slide deck, you start preparing very differently, and honestly, much more effectively.
This is a crucial insight. Understanding that the Q&A is really a test of trust and composure...not just a knowledge check...is a complete shift in perspective for founders.
Great framework for founders to review before their next pitch.
Brilliant piece, Chris - this captures the real investor mindset far better than the usual pitch-deck advice floating around. I love how youāve reframed Q&A as the main event, not the afterthought.
What really stands out is how you connect composure with credibility.
When youāre coaching founders, which investor question do you see most often separate the confident from the convincing?
Let's assume they have a clear & pressing major issue that's a x billion dollar problem and they have an intimate/insiders knowledge how they're fixing it. That's communicated. We're all leaning in. The questions are how are the hacking demand or what's the usage stats and intelligence or disparities about TAM - so basic evidence based stuff. Then there are - vision based questions ie how do you see this playing out, what's for vision for business (this is actually - how is the industry going to run on your rails ie working backwards from the end game) & what's your ambition for the business. Next Round - we all worry about what being sold to the next investor. And if course - what are you looking for this round. Lots of questions that can be asked. Mostly in these bucks unless deeply technical - a different list !
You make important point. The market works on 3 different parallels & also differently along the lifecycle - but to focus on 2 parallels that are universal - 99% of Founders the experience is a slog where the majority don't raise or raise insufficient capital at poorer terms from the investors that are less likely to add value. It feels like the VC have the power to these founders. Vs as you say the hottest founders raise very quickly, the VC compete and fight to get in and the pricing is significantly better and so is the quality of the syndicate. The Founder has the power. Great founders do like pressing questions. The right questions. Not many as you say. But effect their understanding. They don't want money they want partners incl sparing partners. Thanks for sharing your thoughts and wisdom š
yes this is absolutely relative to situation and the experience of most founders is a slog. It is also relative to the stage as later stage deals require more due diligence. But I have seen many cases that investors drag startups along with endless questions and unreasonable requests that can hurt founder's startup and their fundraising journey. Some examples of that would be asking for reference to talk to many customers before a term sheet is presented (or a handshake deal is made), and well as lots of data room requests that simply don't exist in very early stages of startups. Founders in my option should be ready to respectfully push back and set a clear boundary in such cases as it can just derail their fundraising efforts.
šÆ agree. We once said "we don't have a data room. We've more of a data cupboard" - we expect to get pushed back and we don't score deference highly - we want to be led too š. Great comments. Thanks for sharing š
What I often see are (tech) founders who know perfectly well how much developers and server parks they need, but not how to open up new markets. Of course you need to have a product that works, but a market entry plan is the next thing.
šÆ right š thanks for sharing your thoughts and experience š
Love this clarity āTheyāre trying to gauge whether your connection to the problem is deep enough to survive the inevitable pain of scaling a company. They want to see that this isnāt just an opportunity ā itās a missionāā¦.
And it goes both ways. When we asked what the founder wanted from the lead investor last week "total conviction" was their answer . š¤
Turning the conversation into conviction makes all the difference š„
šÆš
Those use of funds questions always tell an important story. Of course, there is a lot of work to be done before you can get there, though.
šÆš thanks for sharing your thoughts
You're very welcome š
If the deal is hot, investors who ask too many questions will just lose from my experience. Hot deals are made within hours...so not much time for back and forth.
Sorry my long reply ended up under Mels comment below/in the feed. I can cut and paste here. It's a great point you make and I've expanded on it - but it's in replies under Mels comment!
The hardest part is to sound real, while also dreaming big!
Trust still comes down to how you think under pressure.
"think" and behave under pressure š
So critical. Great catch. Thanks, Chris.
"Can this founder be trusted to use my money wisely?" - spot on. And that 75% of that spend is on talent. A founder needs strong IQ & EQ to bring in the right builders & scalers.
Really does get burnt on talent š„ well said š
These are all useful things to consider even if youāre not seeking investment!
Thanks. They really are - thanks for sharing š
@chris, I feel most founders underestimate how much the Q&A exposes the way they think, not just what they know.
The moment you realise investors are evaluating your decision-making under pressure, not your slide deck, you start preparing very differently, and honestly, much more effectively.
We like to remind founders "you ARE the pitch" - it's you āØ
This is a crucial insight. Understanding that the Q&A is really a test of trust and composure...not just a knowledge check...is a complete shift in perspective for founders.
Great framework for founders to review before their next pitch.
We aim to please with really actionable content 3x per week š
Big congrats on the book, Chris š¤© this post is super useful - both the questions and how you decoded the intent behind investor questions
Thanks Daria - it's been a blast. Book 3 is in the hatchery šµāš«
Brilliant piece, Chris - this captures the real investor mindset far better than the usual pitch-deck advice floating around. I love how youāve reframed Q&A as the main event, not the afterthought.
What really stands out is how you connect composure with credibility.
When youāre coaching founders, which investor question do you see most often separate the confident from the convincing?
Let's assume they have a clear & pressing major issue that's a x billion dollar problem and they have an intimate/insiders knowledge how they're fixing it. That's communicated. We're all leaning in. The questions are how are the hacking demand or what's the usage stats and intelligence or disparities about TAM - so basic evidence based stuff. Then there are - vision based questions ie how do you see this playing out, what's for vision for business (this is actually - how is the industry going to run on your rails ie working backwards from the end game) & what's your ambition for the business. Next Round - we all worry about what being sold to the next investor. And if course - what are you looking for this round. Lots of questions that can be asked. Mostly in these bucks unless deeply technical - a different list !
You make important point. The market works on 3 different parallels & also differently along the lifecycle - but to focus on 2 parallels that are universal - 99% of Founders the experience is a slog where the majority don't raise or raise insufficient capital at poorer terms from the investors that are less likely to add value. It feels like the VC have the power to these founders. Vs as you say the hottest founders raise very quickly, the VC compete and fight to get in and the pricing is significantly better and so is the quality of the syndicate. The Founder has the power. Great founders do like pressing questions. The right questions. Not many as you say. But effect their understanding. They don't want money they want partners incl sparing partners. Thanks for sharing your thoughts and wisdom š
yes this is absolutely relative to situation and the experience of most founders is a slog. It is also relative to the stage as later stage deals require more due diligence. But I have seen many cases that investors drag startups along with endless questions and unreasonable requests that can hurt founder's startup and their fundraising journey. Some examples of that would be asking for reference to talk to many customers before a term sheet is presented (or a handshake deal is made), and well as lots of data room requests that simply don't exist in very early stages of startups. Founders in my option should be ready to respectfully push back and set a clear boundary in such cases as it can just derail their fundraising efforts.
šÆ agree. We once said "we don't have a data room. We've more of a data cupboard" - we expect to get pushed back and we don't score deference highly - we want to be led too š. Great comments. Thanks for sharing š