As an investor, setting up a startup screening process is the key to making informed decisions efficiently. A thorough startup screening system starts with asking the right questions in the initial application form. These questions provide both informative data about the startup and an assessment of the startup’s quality.
Here in this article, we will show you some key questions you could ask in the application process. The article is divided into the application sections you can add to your application form. Each section will contain some key questions. Although you don’t have to include every section in the form, you should try to include as many sections as you can without making the application too long for founders. A typical startup application form contains 4-6 sections.
Startup & Team Data
Just like most application forms, start by asking for essential data and contact. These should be data about either the startup or the team that would help you get a quick grasp on their whereabouts.
Startup & Team Data Key Questions
- Startup Name, URL, LinkedIn URL, … etc.
- Startup establishment & incorporation dates.
- Startup’s industry & country
- Founders background.
- The number of employees.
When asking questions about the startup’s idea, the goal is to get the most out of the founders. Ask them questions that invite them to share their startup’s idea and their thoughts precisely.
Startup Idea Key Questions
- What does your startup do?
- Why are you choosing to work on this idea?
- Why is now the right time for your idea?
- How will you make money?
- Where will your initial target customers be located?
In the Startup Progress sections, encourage the founder to discuss as much as he/she can about the startup’s journey. This includes product cycle, customers, revenue, funds, and accelerator programs.
Startup Progress Key Questions
- How far along are you?
- Do you have existing customers?
- Are you generating revenue?
- Talk about funds you received,
or accelerator programs you joined, if any.
Even though strategies change, it is good to know the initial startup strategy set by the founders. Ask for their plans on different aspects of the company. This is where you get to know how they think and strategize.
Startup Strategy Key Questions
- Who are your target customers?
- What is your customer acquisition strategy?
- How are you dealing with competition?
- What is your long-term plan for the startup?
Financials & KPIs
Even though you will receive plenty of financial & KPI documents in the due diligence process, it is good practice to get a glimpse of the company’s financials & KPIs in the initial application form too. This will help you find early red flags in the company’s health.
Financials & KPIs Key Questions
- Revenue TTM: Revenue for the past 12 months (if any).
- The number of customers.
- Metrics the startup uses.
- Fundings received.
- Current cash in the bank.
- Monthly burn rate.
How to Make a Startup Screening System
As an angel investor, you can build your own startup screening system with us at VeFund. By signing up with us, you get a VeFund account with your domain (name.vefund.io). This account can be used to share your own custom-built application form and receive new startup deals.
We also offer the VeFund Survivability Index, which is an AI screening tool to assist you with evaluating startups. Join us now and enhance your angel investing activities.