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- ♞ Basic Investor Checklist
What does a real investor’s checklist look like?
Recently, I had the opportunity to speak with an investor who has backed hundreds of pre-seed and seed-stage deals. He was kind enough to share the criteria that he uses when making his decisions. This is the kind of insight that can help you think about your pitch from a new perspective and appreciate what is going on in an investor’s mind when you are speaking to them.
Here are the six points that he says are top of mind for him when he speaks with founders:
Is there a real problem? - He noted that he doesn’t invest in vitamins and that he doesn’t invest in opportunities. What he wants is a real problem, not numbers or figures or justifications for a solution, but a real story that makes him feel the pain that your customers feel. He wants to know that there is someone out there begging for a solution.
Why you? - He wants to know why you, as an individual, are the right person to solve this problem and lead this company. What is your obsession with the problem? Why does it matter to you? What have you done to show you can be successful? I once had a VC ask me when I was running my startups, “Why should I trust a lawyer to run a cloud computing startup?” I didn’t have a good answer; make sure that you do!
Why Now? These are the questions that I see founders messing up the most. This isn’t about why you are doing this now; it’s about why investors need to invest now. Why can’t an investor wait a year, get more data about how your company is doing, how the market is growing, etc. then invest? Why do they need to invest today?
Can you execute? Do you have any evidence that you can make this work? Do you have users, paying customers, or partnerships? You need to give investors something to show that you have the ability to execute on your ideas.
Why are you raising? What are you spending the money on? What does that say about your priorities? What milestone will the money help you reach? Is there another way to hit that milestone? Before you ask for money, you should be able to justify how and why you will spend it.
What is the potential? How big can this be?
Now you have an idea of what an investor is thinking when they talk to you. There are numerous variations of this type of framework used by investors. I have my framework, which is very similar to what I use for judging potential clients. I’d recommend that when you build your deck, you not only consider the pitching advice but also take the time to think about it from the investors’ point of view and analyze your deck using a framework like this.
Do you use a similar framework to judge your deck? |
Are you looking to grow your business? Here is how I can help:
📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)
Onwards and Upwards,
