During your presentation to an investor, the investor will ask you a number of questions. Be prepared to answer these questions at any stage of the fundraising process:
- How does your company fit into the industry?
- What are the major obstacles to your success?
- How did you calculate the size of your market and its growth rate?
- What makes your company different?
- What value do you provide that is not already available to your customers?
- What factors most affect your profitability?
- What are the barriers to entry?
- How will you establish brand-name recognition?
- How will you keep someone with a lot of money from taking over your market?
- How will you continue to protect your intellectual property?
- What is the profile of your end user?
- What motivates you?
- What advantages do your competitors have?
- What reaction do you anticipate from your competition?
- How do you intend to acquire market share?
- How important is advertising?
- How do you plan to fill staffing requirements?
- What makes you lose sleep?
- What is the lifecycle of the product?
- What other products do you anticipate developing?
- How do you compete in terms of price, performance and support?
- What alternate suppliers are there?
- What new capital expenditures will be required?
- Will your present facilities accommodate expansion?
- How much more financing will you require beyond this round?
- What is your exit strategy?
Take notes on what the investor is focusing on and saying. Reply in a timely manner (less than one week) to the investor’s follow-up requests or questions that you could not answer at that time.
Cardis, J., et al. (2001). Venture Capital: The Definitive Guide for Entrepreneurs, Investors, and Practitioners. Toronto: John Wiley & Sons.