10 questions to ask before backing a private business

Why questions matter more than answers

You do not need to be a financial expert to evaluate a private business, but you do need to ask good questions and notice when answers are vague. These ten questions are a starting point, not a substitute for independent legal, tax or financial advice.

1. Who are the founders, and why them?

Look for relevant experience, commitment and honesty about what they do not yet know. Ask how much of their own time and money is in the business, and who else is on the team.

2. What problem does the business solve, and for whom?

Can you explain the customer and why they pay in one sentence? In the UAE and GCC, check whether the model works across different markets, licences and customer habits.

3. What do the financials really show?

Ask for revenue, gross margin, monthly costs and cash in the bank. For startups, understand the runway — how many months until money runs out. For SMEs, ask for accounts and how dependent profit is on the owner.

4. How much debt does the company have?

Loans, overdrafts and supplier credit must usually be repaid before shareholders receive anything. Ask what is owed, to whom, on what terms, and whether any assets are pledged.

5. How is the company governed?

Who sits on the board? How are major decisions made? Are accounts reviewed or audited? Good governance does not prevent failure, but it reduces surprises.

6. What exactly am I buying, and on what terms?

Shares, a convertible instrument or a stake in a pooled vehicle? What is the valuation, and how was it set? Are there preferences that let other investors be paid first? Ask for the documents and read them.

7. How much dilution should I expect?

Find out how many future rounds the business expects to raise, and whether you will have the right to invest more to protect your percentage.

8. How and when could I get my money back?

Is the plan a sale, a listing, dividends or a buy-back? What is a realistic timeline? Understand that there may be no way to sell for many years, and secondary sales depend on a willing buyer and transfer rules.

9. What are the biggest risks, and what happens if things go wrong?

Ask the founders to name their top risks. Consider competition, regulation, key customers and key people. Then picture the downside: could you accept losing the entire investment?

10. What information will I receive after investing?

Private companies are not required to report like listed ones. Ask how often investors get updates, what they include, and whether valuations will be revisited only on real events such as a new funding round.

Using the checklist

If a business cannot answer these questions clearly, that is useful information in itself. Many experienced angels pass on far more opportunities than they back.

SUMMIT is live in Early Access; investing is not live yet. Educational content only — not investment, legal or tax advice. Read our risk disclosure for more on the risks of private investing.