7 Questions to Ask a Startup Fundraising Mentor

5 min read
7 Questions to Ask a Startup Fundraising Mentor

Here are some the most important questions to ask your mentor to help you keep your startup fundraising experience on track:

1. What are the different types of funding options available to me?

The most popular types of startup funding include friends and family, angel investors, venture capitalists, startup accelerators, and crowdfunding campaigns. However, these are by no means the only fundraising options available to startup founders. A mentor can help you evaluate your startup’s unique circumstances and determine which type of startup funding is right for you.

2. How can I find the right investor for my startup?

The first step is to research potential investors who might be a good fit for your startup. Look for investors who have experience investing in your industry and can offer the specific resources your startup needs. 

Once you have identified potential investors, reach out to them through networking events, email, or social media to gauge their interest in your startup. 

If you get a meeting with them, focus your pitch on your startup’s unique value proposition, growth potential, and financial projections, and be prepared to answer questions about your team, market opportunity, and competition. 

A startup fundraising mentor can help you identify the best investors for your startup and give you advice as you develop your pitch deck.

3. How can I build relationships with investors if I don’t have a network?

Fundraising can seem daunting if you’re a new startup founder who hasn’t yet built a network of investors. The first step to begin forming relationships with investors is to get introductions. Investors will be much more receptive if you’ve been introduced to them through someone they already know and trust. Reach out to other startup founders, or any contacts you have who you know are well-connected in your industry, and find out if they know any VCs or angel investors who are looking for new prospects. 

A mentor can help you work on your outreach strategy, as well as show you how to fundraise for a startup using tactics like FOMO to generate interest from more investors.

4. What should I look for in an investor?

There are several key qualities to look for in every potential investor.

With help from a fundraising mentor, you can learn to recognize the differences between an investor who will be a great fit for your startup’s specific needs and one who isn’t compatible.

5. What is an investor looking for when I pitch?

Investors evaluate startup pitches based on several key factors, including the team's experience and track record, and the startup’s market opportunity, traction, growth potential, product-market fit, and existing social validation. However, investors will prioritize different factors at different startup fundraising stages.

Investors will typically look at your founding team's experience as an indicator of your ability to execute your vision. This makes your team one of the most critical elements of your startup that investors will evaluate. 

Your startup’s market opportunity, traction, and evidence of product-market fit show investors that you have identified a significant market need and found your ideal customers. Furthermore, social proof in the form of customer testimonials and impressive user engagement metrics can help you persuade investors.

There are a lot of important factors to juggle when you’re preparing your investor pitch. A startup fundraising mentor can use their personal experience to help you hone your pitch and ensure you don’t leave out any crucial elements.

6. How should I determine my valuation?

Determining your startup’s valuation can be a challenging task, since most startups have little or no income and may not yet even have a functioning product. One approach you can use to arrive at a valuation for your startup is to compare it to similar companies in your industry. Most investors will be willing to accept your valuation if you can back it up by pointing to a recent, similar valuation in your market. You can also use the cost required to create another business just like yours from scratch to determine your startup’s valuation — this is called the “cost-to-duplicate” method.

It’s very difficult to decide on an accurate valuation for a startup, especially if you have little prior experience doing so. An experienced mentor can help you determine your startup’s valuation so you can enter the process of negotiating with investors fully prepared.

7. What questions will a VC ask me?

After the pitch, startup founders can expect a range of questions from investors about their business plan, team, and vision. Investors are most likely to ask about each of your team members’ specific backgrounds and roles at the startup, as well as more detailed questions about the company’s traction, growth potential, and funding needs. They may also ask about your financial projections or burn rate. In general, investors will be looking to assess the viability of your startup and its likelihood to produce exponential returns on their investments.

A mentor with fundraising experience can help you practice fielding your industry’s most common investor questions until you have your answers down to a science. 

Did you know? Many of Silicon Valley’s most successful startups have received funding from a group called the PayPal Mafia — however, this “mafia” isn’t as sinister as its name implies. The PayPal Mafia is actually a small alliance of former PayPal figures, including Elon Musk, Peter Thiel, and David Sacks, who now frequently invest together. This group’s significant impact on the Silicon Valley startup scene goes to show that funding and mentorship from top players in your industry can constitute a best-case scenario for your startup’s long-term prospects.

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Darren Sugiyama

Darren Sugiyama

Author - "Living Outside The Cubicle"
Motivational Speaker

Apex Outsourcing Inc.

Darren Sugiyama is an entrepreneur, nationally recognized motivational speaker and an internationally acclaimed author. His published works include "Living Outside The Cubicle - The Ultimate Success Guide For The Aspiring Entrepreneur," “How I Built A $37 Million Insurance Agency In Less Than 7 Years” and "The Icon Effect" to name a few. He has built several successful companies in multiple industries and has delivered keynote speeches to multi-billion dollar companies like Aflac, Colonial Life, and UNUM. Darren’s bluntness, non-nonsense style and candid approach makes his work that much more engaging and inspiring to entrepreneurs all over the world.

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Jon Swire

Jon Swire

Instructor - UCLA
Real Estate Investor

The Agency RE
Keller Williams

Jon Swire is one of the nation’s leading real estate professionals and author of “There’s No Free Lunch in Real Estate”, which details simple tools and strategies to create life-changing wealth. Jon also teaches Real Estate Investment Analysis at UCLA Extension, as well as offering speaking and mentoring services to help real estate investors secure their financial futures. Since 2002, Jon has helped clients buy and sell over 500 apartment buildings in excess of $1BB in value throughout the United States. Jon has bought and sold over 40 properties for his own portfolio and overseen the rehab of 1,000+ units in the past 5 years. He holds an M.B.A. from the Anderson School at UCLA and a B.S. in engineering from Northwestern.

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Joe Coyne

Joe Coyne

General Partner - Studio VC
Venture Capitalist

Studio VC
Bain Capital

Joe Coyne is a Venture Capitalist focused on helping entrepreneurs scale their businesses from day one to exit. Joe’s experience spans Venture Capital, Private Equity and Investment Banking, having started his career on Wall Street and transitioned to finding his passion for investing at Bain Capital Ventures, Samsung Electronics, and now as Managing Partner of Studio VC. Additionally, Joe studied Finance at the University of Wisconsin and earned an MBA at Harvard Business School. Joe is passionate about helping startups founders and mentoring young professionals looking to break into venture capital as a career.

Bain Capital Partners
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Samsung Electronics
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