Here are the 3 questions you should ask any founder when you’re researching an investment into his start-up company.
1.) How’s your plan going?
This question goes right to the heart of things. It will tell you a lot of important things, especially how confident they are in their own start-up. If they claim that all goes well and according to plan, but you feel they haven’t actually accomplished much, steer clear.
2.) What opportunities are you most excited about right now?
Ask the founder to discuss a few different ongoing projects and how they will affect the business in the long run. This allows the founder to demonstrate their knowledge of different areas of the business.
3.) Why did you start this company?
The motive to start a company is very important. If the answer is that they needed money, or thought it is cool getting into a new industry, alarm bells should start ringing.
Good founders should be very passionate about their business and what they are creating. They usually have worked in the industry for many years, and finally had a realization about how it needs to change or where it’s headed next. They offer new solutions for their customers. Sometimes great founders build a start-up because they want to use the product themselves. Whatever the reason is, they should be passionate about this new business.
The origin story of a startup is important. If you talk with founders who don’t give a very good reason for starting the business, they probably aren’t going to take it too seriously.
Sven Franssen