Mostly metrics

Mostly metrics

Share this post

Mostly metrics
Mostly metrics
Cracking the Code
Copy link
Facebook
Email
Notes
More

Cracking the Code

Decoding the Real Questions VCs Ask During Fundraising

CJ Gustafson's avatar
CJ Gustafson
Jun 01, 2023
∙ Paid
27

Share this post

Mostly metrics
Mostly metrics
Cracking the Code
Copy link
Facebook
Email
Notes
More
2
Share

Before we jump in, many of you have asked what my writing process looks like. Lucky for you, my wife snapped this illuminating picture of me.

“Yes, yes, and then we carry the one, OK now I remember”

Apparently my writing process looks like Wednesday, 10:17 PM, surrounded by a collection of empty Amazon boxes, sugar free cough drops and Miller Lites.

I’m basically J. D. Salinger if he liked Net Dollar Retention and the occasional tall boy.

And yes, I use a ThinkPad. Why? Based on my highly scientific research, not all CFOs who use a MacBook go to jail, but all CFOs who went to jail were using a MacBook.

Thinking

Have mercy on your soul

I’ve been a part of over $900M in startup fundraises. And from the thousands of hours preparing pitch decks and fielding data requests, I’ve identified a predictable line of questioning you’ll get from VCs when you ask for capital.

These questions are designed to validate their investment thesis in your space, while getting comfortable with underwriting your company’s specific execution risk.

But their questions don’t come at you straight. You see, I’ve learned that VCs speak in code. There’s a question, and then there’s the real question.

I’ll take you through the most common questions VCs ask when you fundraise, and translate what they are really asking.

I’ve bucketed 37 timeless questions into the following categories:

  • Financial profile

  • Go to Market and Revenue Model

  • Buyer Profile, Budget, and Education

  • Product

  • Pricing and Packaging

  • Partnerships

  • Competition

  • Competitive Differentiators

  • Headwinds / Tailwinds

And it will follow the format below:

The Question Asked

  • The “Real” Question


Financial Profile

How many more years do you think you can grow at more than 100% for?

  • What type of ambitions do you have? Do you have a shot at achieving the legendary triple - triple - double - double - double pattern?

T2D3Pic

What’s your company’s North Star metric?

  • How do you judge success? What’s the most important lever in my forecasting model?

What’s in your Cost of Goods Sold?

  • Which components of your COGS scale linearly with revenue? Please show me there’s some leverage in this model…

Do you think you can get to $100M in run rate revenue within your core market?

  • Could you IPO even if you never built another product?

What’s your target cash flow breakeven date?

  • How many more fundraising rounds will we need after this, and how much should I estimate getting diluted by future investors?

How many people do you plan to hire next year? What roles are you most focused on bringing aboard?

  • Are you stacking bodies? How much more expensive is this model about to get after I give you money?


Go to Market and Revenue Model

This post is for paid subscribers

Already a paid subscriber? Sign in
© 2025 Mostly LLC
Privacy ∙ Terms ∙ Collection notice
Start writingGet the app
Substack is the home for great culture

Share

Copy link
Facebook
Email
Notes
More