Twenty Questions You Will Be Asked By Venture Capitalists (If You Get That Far)

By Laurence K. Hayward

Remember the game Twenty Questions? The contestant uses the best combination of questions, which can be answered with a simple "yes" or "no," in order to discover a piece of information held secret by the other player. The objective is to reveal the unknown information with the fewest questions possible.

This game shares several similarities with an interview between an entrepreneur seeking financing and a venture capitalist (VC) evaluating an investment opportunity. As the interviewed entrepreneur, you can expect pointed and challenging questions. You might feel like the interviewer is trying to box you in as he or she narrows the choices, in order to hone in on the "answer" as quickly as possible. Recognizing that venture capitalists (VCs) reject a far greater number of deals than they accept, the quickest way for this interviewer to finish the game is to find a fatal flaw, a deal-killer, a quick "no."

The primary difference between the game Twenty Questions and the venture capital interview is that you, the interviewee, can't answer the questions with a simple "yes" or "no". So, in order to help you prepare, outlined in the following posts are twenty questions that VCs frequently ask entrepreneurs. Following each is a brief explanation of what the VC might be trying to uncover and some guidance on how you might prepare a response. While the order of the questions will vary, the winnowing process was taken into consideration when creating this list.

Laurence K. Hayward is the Founder and CEO of TheVentureLab. To learn more about him follow the link here