The first time I brought on investment was 2009.
I was 22 and playing online poker Sit-and-Gos (SNGs) full time. I had a large enough sample size of games played with an okay ROI. Investors covered buyins and played an active coaching role. Negotiations were simple. Risk was higher, but the games and stakes I played were beatable to the tune of ~18% ROI (before receiving coaching, structure, and accountability).
The ROI investors in startups look for is obviously very different from online poker SNGs. But similarities do exist between the early questions and communication.
Here are some questions (bullet points are personal reactions and opinions) I’ve been asked, as Nebullam goes through its seed round of funding this year. Please note that these questions often fall more on the seed stage and angel investor side for startups — I can only speak on what I’ve experienced.
- Are you coachable?
I often interpret this as being able to separate ego from logic
Been-there-done-that founders/investors want to know you’ll heed their advice
- How much have you personally invested to date?
In poker, I had already paid out of pocket for coaching, as well as put time into not only the games, but forums and studying, too. Network building had already been happening for over a year as well
Nebullam founders have poured over $30,000 of our own money into the venture and its technologies
- What are you willing to give up, or are you currently living above your means anywhere?
This can mean the team or the company. In my observations, the most common company costs in living above the means comes in the form of pricey office space
I’ve been asked if I have car payments or house payments, or any bigger bills that show up monthly. My answers are uncommon. I own no car. I live in a studio apartment. I don’t even own a bed. Crazy? Yes
4. What is your international experience?
Leaving your known community helps build character. The more you’ve traveled, the more you’ve lived among other cultures, languages, and situations. All of these experiences can lead to being a well-rounded individual
“The world is a book, and those who do not travel only read one page”
- What do you do when not working?
This is a question I’ve stumbled to answer on multiple occasions, as I don’t believe in a work/life balance, and I’ve been afraid to voice this opinion before
When I mention boxing and coaching, I now highlight its benefits; such as living in the moment (if you’re not, the results can be serious physical injury), helping to further develop my leadership skills (we coach over 100 boxers a year), and the demand to stay in top physical shape (giving me an outlet for my anxiety and depression)
- What are you doing to build a family-like atmosphere or culture for a growing team?
It took hearing this question twice in one day for me to arrive at my current opinion. With Nebullam, we aren’t looking to build a warm and fuzzy family atmosphere. We are building a sports team to win championship after championship. Families fight and are harder to separate from. Players are a little easier to trade and trade for
I think many small teams are too focused on trying to provide a utopia-like culture, or what they’ve heard is fun and colorful in the world’s best startups
I’ll leave it at those 6 for now.
1 common ending question I’ve found myself asking to investors lately is, how will you react when I call with bad news?
I’m trying to set a stoic tone early on, and bad news is inevitable. Why not hear about how a shareholder may respond, or has responded with past bad news?
What are your thoughts or criticisms?Tweet me @MooneyMillions
This post was originally published at http://www.cre8.cm/blog/personal-questions-you-may-hear-more-than-once-when-fundraising.