Disclaimer: We currently lack expertise in startup valuation and validation. We therefore do not have an established valuation system and clear investment framework yet.
Team & Roadmap
Motivation & Formation
- What has been your motivation to start your startup? Who was the original founder of the startup?
- How long is the Team already working together? How did you find each other? Why did you decide to work together?
- Which other career option did you consider? Why did you decide to join a startup opposed to joining a corporate?
- How is equity and voting power split?
- Which values are important for your company? Which goals are important? Do different team members bring different accents into this?
- What are the background situations and personal goals of each team member?
- Does any of the core team members have a side hustle or is this startup the side hustle?
- How do yo structure team events? Do you spend time in your free time together?
Workflow
- How is the team working together? How do you imagine the company will work together? (Remote, in-person etc.)
- How are important decisions taken?
- How do you split work?
- Are there core beliefs or principles that shape your work?
- Do you have one official managing director/ceo?
- Which tools does the team use for planning, coordination, communication, documentation etc?
- How is your workflow during a typical week?
- What is the work-life balance of team members?
- How do you resolve conflicts? Did you already have any first major conflicts?
Skills
- Which previous and relevant experience do team members have?
- How & why did every team members choose their area of study and work? What are you the most excited or passionate about?
- Do you have prior startup or leadership experience?
- Are all necessary skillsets presented in the team to make it a success? If no: Which skills are missing?
- Which areas in the startup building process will be first time challenges for team members?
- How do you tackle new problems? How do you accumulate new knowledge?
- How do you take decisions when limited informations are available?
Roadmap
- Do you have a built out roadmap? How did you construct that roadmap? How do you decide what to focus on? Are you willing to share that roadmap?
- Do you have concrete plans to pivot if plan A is failing?
- How far into the future did you plan ahead?
- How do you prioritize work? How do you measure progress?
Recruiting
- Which positions are you going to recruit for first? Why?
- What are you looking for in your first employees?
- How do you plan to build your recruiting funnel?
- How are you planning to retain important employees?
- Do you have any prior experience with recruiting? Do you already have employees?
Service providers
- Do you have strong established partners and service providers e.g. law firms to work with?
- With whom are you working?
- How much budget do you allocate to different functions?
Budgeting
- What costs did you have over the last years/months (since inception)?
- Do you currently have a budgeting plan? Are you willing to share it?
- If you are not cash flow positive do you know how long your cash will last before you need to cancel the project? e.g. 9m month run away cash.
- How much money are you planning to raise in your next round?
- How are you planing to spend that new cash? Do you already have concrete mapped out budget plans and projections? How much runway will you have?
- Do you see a way to grow faster (or more sustainably) by making certain investments (hiring developers, hirings sales reps, advertising)?
- Are you planning (costly) investments in the near future? (Capex)
- Do you currently receive a salary? What will your salary be after a successful funding round?
- Are you well prepared on the tax front (monthly payment of payroll tax, VAT) to avoid unexpected tax payments? What processes do you have in place for accounting/ tax and how automated are these? (Checklist here (starting with "1. How to start Finance?"): https://www.florianhuber.de/blog/know-your-numbers-finance-and-controlling-in-early-stage-startups/)
Vision, Market, Product & Competition
Vision & growth journey
- What is the Mission and Vision of your company?
- Where do you want to be in 5 or 10 years?
- How do you see your further growth journey? (e.g. further VC-Rounds, Exit)
- How fast do you need to grow in order to succeed? How long do you think the window of opportunity will stay open?
- How soon can you achieve profitability? How much do you want to optimize for profitability vs. growth?
- Which kind of longterm margin do you think is realistic? Why?
Market
- How would you describe your business model?
- Why does the market opportunity exists? Why did no one else capture that market yet?
- Can you quantify the current & future demand for your product? (Revenue)
- How big is the total addressable market? How large is the serviceable available market? Which assumptions did you make in your calculations?
- Which % marketshare do you think you can obtain and hold longterm. Why?
- How much revenue did you generate so far?
- How much realistic revenue can you generate within your current step one niche/vertical/strategy? Do you have revenue growth plans and projections?
- Do you have expansion plans beyond that? Which verticals are you going to tackle next? When will you tackle those verticals?
- What are you revenue growth projections? What kind of assumptions, targets, kpis did you set yourself? What is currently the limiting factor for growth?
- How do you market your product? How high are your Costumer acquisition costs and costumer lifetime value?
Product
- What makes your product stand apart from competition? What is your USP? Do you have an unfair/sustainable advantage over your competition?
- Which part of your product are you most proud of? In which area do you need to get better?
- Are there any (technical) explanations/demonstrations of your product available so we could get a better understanding of it?
- How could we independently validate the quality of your product?
- Has the product gone through iterations? For how long is the product already in its current iteration?
- Can you sketch the growth curve during the different product interaction stages?
Competition & Moats
- What is the endgame in your market? How strong are network effects? How much consolidation are you expecting to see?
- What is the most valuable resource in your business? What will be the deciding factor which businesses are going to be successful in your market?
- How will one business be able to take market share from the other? (Better product, pricing etc.)
- Which types of moats are you hoping to build for your business?
- Are there any moats that competitors have which are not obtainable by you?
- What are power dynamics between different participants in your market? (e.g. between you and your vendors/partners and costumers) Is this visible by the way contracts are structured?
- What are your two biggest direct competitors and who are your two biggest indirect competitors? Do they already have similar products on the market? Are you seeing any similar products?
- Which type of players are you seeing as your most serious challengers in the next years?
Sales (Clients & Partners)
- How much revenue are you targeting per client? Will this revenue be one time or recurring?
- Does your business model depend upon collaborating with certain business partners?
- Do you currently have clients/partners signed? If yes which ones? Which kind of conditions did you agree upon?
- How many potentially clients/partners did you already had talks with it? Is it difficult to identify and start conversations with potential new clients/partners?
- What are your conversion ratios at different stages of your sales funnel?
- What are major hurdles you are facing in your conversion process?
- How many different clients/partners do you need in order for your business model to succeed?
- How large is the pool of potential clients/partners you can work with? Which % of them do you need to sign in order to succeed?
Regulatory
- Which regulatory challenges are you or the industry facing? How fast is the regulatory environment changing?
- How can you solve those challenges or even provide a solution for them?
- Are you able to fully comply with regulatory demands or do you need to take certain regulatory risks?
Investmentcase & Exit
Co-Investors
- Have you been looking for investors? Who did you talk to before? With how many investors have you been talking?
- How many VCs are active in your space? How large are they? (aum)
- Do you currently have investors? If yes who are they?
- Which conditions did you have in your last funding round? (size, structure)
- How is your cap table structured? Is there going to be an employee stock option plan?
- Do you vest founder shares? If yes over which period?
Legal Structuring & Governance
- How are you planning to structure your current funding round?
- How do you plan to structure the angel part of it?
- Are there any specifics in the term sheet a potential angel investor should know about immediately?
- At which point do you plan to establish a board?
Working together
- What are you looking for in a business angel? What is important for you when working together? What are non gos and things you'd like to avoid?
- How do you plan to keep your investors up to date?
- How much access & transparency would a business angel have?
Exit
- Are you targeting an exits or do you want to try staying independent?
- What are your exit options? Who could be interested in buying you?
- In which timeframe and at which valuation could an exit be realistic?
- Which kind of terms did you agree with lead investors on? (Liquidations preferences, drag/tag along etc.)
Blindspots
Questions not asked
- Are there any other important factors or areas i should know about?
- Are there any other important questions i did not ask yet?
- Are there documented questions from other investors i could access?
- Which other more advanced questions/due diligence did you conduct with your lead investor/vcs?
Risks
- What would you say are the biggest risks when investing in your company?
- What would you say are the biggest weak points of you business model?
- Where do you personally think you have the biggest blind spot and is there a team member who covers it for you?
- Are there large singular risks that could happen (e.g. damages, legal challenges)? Do you have risk mitigation strategies for them?
- Is there any risk i might not see as of now? Could you help me to see it?
Opportunity
- If you are looking into the future what are you personally most excited about?
- Why should i want to invest in you and your company?
- Is there any potential i might not see as of now? Could you help me to see it?