I am the founder of a website. If I go to meet an angel investor,what questions will he probably ask me?


5

I have developed a website. It is under internal testing. My website is a platform. You can ask for people to do something for you and you pay them; on the other hand, you can do something for others by spending your time and get paid.If now I go to meet an angel investor, what questions will he probably ask me?

Funding Angel Website Investors

asked Jan 13 '10 at 12:22
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Steven
1 point
  • How is it a platform? Can users build something with this or is it just a service to use? – Jeff O 8 years ago
  • It is a service to use. – Steven 8 years ago
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5 Answers


7

The investor will want to know:

Who you are, why he wants to work with you and what sort of "proof" you have that you'll be a good startup exec/leader.

Market opportunity, pain point to be addressed by your product

How the product is different, better, protectable. Roadmap of development plus a demo of what you have.

Sales and marketing strategy. Many, many startup execs fail at this point so don't go with the generic "if you build it they will come" or "it's gonna be viral" bs. Your current level of traction; where you will be in a few months, a year, etc

The sorts of advisors and team that you've attracted to work with you - this can help prove that you are a real leader and that your product is hitting a real market need

$ you need to get where you are going, high level idea of how big you think the company can become

Some ideas around the structure and valuation you are seeking for the investment.

You can check out my blog post on a VC investment memo; good angels usually want to know similar or the same items: http://www.startable.com/2009/05/07/venture-capital-investment-memo/ -Healy Jones

answered Jan 14 '10 at 02:07
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Healy Jones
116 points

2

The questions I would prepare for (take with a HUGE amount of salt, since I am neither an angel investor nor a venture capitalist myself):

  • Why are you seeking investment at this time? [They will want to know that their funding will make a positive difference, but more importantly they'll want to know that you're seeking funding because it's necessary to implement the next step of your plan, not just because "it's what people do" (in which case you don't have a clear plan).]
  • How do you intend to make this website scale? What evidence do you have that people demand a service like this? [They want to know that they're investing in something that's not going to fizzle out.]
  • How do you intend to make money from this? [I would assume that you plan to take a cut of each transaction, somewhat like PayPal, eBay or Amazon. But it's good to be explicit about that, and about why you think it will work.]
  • What have you built so far? Why are you going to be more successful than a competitor? [The first question goes to how much of a head start you have and how much risk there is that you'll run into problems while finishing even the bare minimum for your site to be successful. The second - well, if you don't have competitors now you surely will. You'd better be a better investment prospect than all of them, due to expertise, head start, personnel, the details of your implementation / plan, or other factors.]
answered Jan 13 '10 at 13:22
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Arkaaito
300 points

1

All the answers so far are excellent so wanted to come at this from a different angle.

From the people I know who invest in start-up (albeit this is only 3), it is not what they ask you and therefore the answers you give that will be the most important thing. The most important thing is YOU and the way you come across. Afterall, investing your your business, they are investing in you. They want to see that you are passionate, enthusiastic but also realistic. If you don't believe in what you are doing, they won't. They want someone who is grounded and not a fantasist but also has the single-minded drive and determination that whatever the setbacks, they will fight to make their business a success.

Good luck and go get 'em!

answered Jan 14 '10 at 23:45
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Dr. Phil
86 points

1

Bench depth is important. The skillset required to prototype an online service and that required to grow an online business are very different. So who is on your team, and what successes have they had in the past? Those are crucial.

Scaling fast is key. Where will your initial users come from? Do you have a believable model about the volumes of transactions you will need to breakeven and profit over time?

Know your market. You should have the most in-depth knowledge you can manage in the time you have about every other similar service in the world. How is your service different from Amazon's Mechanical Turk, or eLance, (or Craigslist or Kijiji) for example? How do you plan to compete for userbase with someone like Amazon on the scene? If they switch to an all-hard-currency model of value exchange, is that going to kill your business?

answered Jan 15 '10 at 01:21
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Neil La Chapelle
51 points

0

You should be prepared to answer the question:

"Why do you need the money?"

answered Jan 13 '10 at 13:26
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Tim J
8,334 points
  • This does not provide an answer to the question. To critique or request clarification from an author, leave a comment below their post. – Karlson 6 years ago
  • @Karlson - This was written a long time ago - so it took me a while to remember what I wrote. I should have put the question in quotes. This does not represent MY question or a comment on the poster's need for money - this addresses his question of what will the investors ask. It is one of the questions that will be asked by potential investors. I will edit to reflect that. – Tim J 6 years ago
  • Hmmmmm. I wouldn't have thought it inserted a standard comment on the review. Live and learn... – Karlson 6 years ago
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Funding Angel Website Investors