The best question VCs can ask you and you can ask VCs.


When founders and startups meet with Venture Capitalists, Angel investors, or potential advisors, most of the time is spent talking about the founder’s insights, technology, product, or the market they intend to innovate, disrupt, or create. In my experience across both sides of the money-table as a VC and as a founder, the hardest and the most insightful question is often not about the knowledge founders or startups have, but rather, what have they learnt. This concise question embodies just about everything the VCs want to know about you as well as your company.

What you “know” is the platform that you stand upon and the framework for building your product. What you “learnt” is the ย valuable part that allows you to create something of value, hopefully – a lot of value – for your customers. This is where you have the opportunity to figure out something that others have not understood yet. Thus, ‘learning’ is your unfair edge in an otherwise irrational pursuit where the odds are against you most of the time till you trump them with your learning, not knowledge.

If knowledge is velocity, what you have learnt determines your acceleration, i.e. the second derivative.

(Thanks @jessefarmer)

This seemingly simple question is in fact quite complex. When a VC asks you this question, they are judging multiple things at the same time:

what does it tell them about your learning style and pace of learning
what does it say about your willingness to learn
what does it say about your willingness to fail while learning
how does it educate them about your market, your technology area, your competitors

And when VCs ask this question of their portfolio companies, they are keenly focused on the acceleration (or deceleration) of your company, not the somewhat static ‘knowledge’ you started off with when they invested.

I also think this is also the question founders should ask potential investors. Rather than talk about fund size, investing philosophy, market-trends,.. (all things you must know before meeting them), ask them the following two questions:

1. What have they learnt in the past 2 years.
2. What new behavior, investments, or market developments do they expect to occur given that learning.

If you hear answers that are rambling, unfocused, or evasive, it will tell you more than their past record or their current investing ‘thesis’.

When you hear clueful answers, it should signal to you that the VC asking this question is more likely to be thinking ‘long-term’ vs. ‘flavor of the day’. VCs that can discuss what they have learnt and how they see it influencing the next few years are rare and good for early stage startups.

p.s. The words ‘learnt‘ and ‘learned‘ are interchangeable here. i have a preference for using ‘learnt’, having learnt my english language skills reading newspapers and listening to the BBC in India and later during graduate studies in Canada. “learned” is the more commonly used form of the word in U.S.A.

 

 

  • http://www.semilshah.com Semil Shah

    This is a very insightful post. I love the line: “If knowledge is velocity, what you have learnt is acceleration.”

    • https://twitter.com/#!/rohit_x_ rohit

      Thanks Semil. Simple and meaningful question.

  • Aman

    “what does it say about your willingness to fail while learning” !!

    I guess its important to realize that , sometimes you need to fall in order to know , how not to !!

    Very Good Post !!

    Regarding learnt and learned , its ironical that you learnt from BBC ๐Ÿ™‚ while you had an awesome English teacher as your mother !!

    • https://twitter.com/#!/rohit_x_ rohit

      Thank you Aman. Yes, English teacher at home was the first and obvious learning point though they never sat me down for any ‘lessons’. Newspapers, radio, and books were all around for learning English.

      Factoid: I did not know *any* English till Grade 5 (Hindi Medium schooling – Gita Vidya Mandir, Kurukshetra).

      • Aman

        Yupp ! People from your age group , who didn’t go to convent schools at that point of time , started English only in Grade 6 .Even today I think there isn’t any convent in kurukshetra ๐Ÿ™‚ for that matter .

        I see u didn’t mention TV , must hv been really different growing up back then ๐Ÿ™‚

        • https://twitter.com/#!/rohit_x_ rohit

          Doordarshan – yes. TV as we know it now with 100+ channels – no.