When presenting your business to potential investors for funding you will be asked many questions about your company, competitors, and industry that you should be confidently prepared for. In this post we will cover a few of the frequently asked questions that Venture Capitalists and Angel Investors ask while meeting with entrepreneurs.
1. Tell me about your business
Do this as quickly and efficiently as possible. Forget the elevator pitch - You have one or two sentences to explain your business. I recently heard Angel Investor Dave Berkus explain the importance of giving a business Mantra. The example he used was for a company called Vokle, saying their mantra could be: “We are the Skype of town hall meetings.” In that one sentence you know their company involves online video chat and a moderated group. In just a few words, you can catch an investors attention.
2. Tell me about your management team's background
Layout the accomplishments that you and your team have already made. You get bonus points if your past endeavors include a recognizable company. Investors want to know that you have a management team that can get your company where it needs to go.
3. What is to stop your competitors from copying your idea and shutting you down?
Sure, you have a good idea but what sets you apart from your competition? Why can you do it better? What is to stop your larger competitors from copying your product or service? Why will people buy your product when they are already using your competitor’s? Investors need to know you have a plan to take over and control a large share of the market.
4. How much funding you need and why?
You came for money so be ready to tell your investors how much you want. Show them you’ve done the research and know how much you need to accomplish specific milestones and what your plan is once you reach those milestones.
5. What is your exit strategy?
An exit strategy is just as important as your initial business planning. Investors want to know how they are going to make a profit off your business so you need to let them know what your exit plan is. Keep in mind, less and less companies are going public these days.