The right questions to ask investors when raising money in a down market – TechCrunch

With the sound of economic collapse And with continued market volatility, fundraising can feel especially difficult in the current environment.

For both first-time and seasoned founders, the right fundraising toolkit can make or break a successful round — even in a down market. So what are these tools? I strongly believe in the value of data-driven storytelling to pitch your company to potential investors. Another important factor is a strong understanding of your company’s capital needs and the ability to build a financial model to get there.

While crunching the numbers is an important part of the process, we can’t forget that getting an investor is really about finding a strong relationship with a partner — someone who knows and trusts your business and is a strategic choice to bring your business. The company to the next stage of development. Knowing which questions to ask during your time with an investor can be challenging, especially since the current climate has some investors tightening their belts.

However, many investors still have capital to deploy despite the downturn. Here’s what I tell founders to do to make the most of their fundraising meetings and ask them to identify the right investment partners for their company’s future.

The main questions for every investor meeting

A recession doesn’t mean all investors are closing their doors; Yes, some may choose to take a more conservative approach for the time being, but when you’re still dealing with investors who are active in the market, you don’t need to change much about your usual pitch.

Some basics remain the same: engage in conversation and be prepared to back up your story with solid metrics. In fact, the more a founder allows the investor to ask questions in a way that provides a better understanding of their business and investment strategy, the easier the rest of the conversation will be. Some important questions to ask investors are:

Tell me about your company and how you operate. Are you a generalist or a sector specialist?

If they’re generalists investing in early-stage companies, that means they often rely on their network for due diligence and deal-finding — making it harder to get funding if they do. not at all Log in through the network. If that’s the case, try getting them to remove their network; Connecting with their portfolio companies helps keep the “inside” down the line.