Potential investors will have lots of questions for your company. Prior to approaching investors, you should be able to answer all of these questions.
What is your business model/how is your company going to make money?
While it is important to focus on your product/service and acquiring customers, it is just as important to figure out your business model. How is your company going to charge for its product or service? Are you selling to the end consumers or to suppliers and other businesses?
Who is your target market?
Knowing who your ideal customer is will help your company focus its marketing and sales efforts.
Who are your competitors?
Almost every company has competitors. You should be able to discuss each of the competitors in your company’s pitch deck or investor marketing materials.
What sets your company apart from and makes your company better than the competition?
In addition to highlighting the competitors, you should be able to discuss the things that set your company apart, and why your company is more likely to succeed.
Wondering what is best for your company?
We are always happy to discuss the funding and growth options available to a company.
What are the risks and how does your business model minimize those risks?
Investors understand that every company faces risks. An investment without risk would provide little return.
It is important to be able to acknowledge the risks associated with your company, discuss the factors affecting those risks, and explain how your company plans to mitigate or minimize those risks.
What are your financial projections based on?
Anyone can put together a document showing exponential growth for their company over the next few years. What is far more important is the data behind that growth. Your company should prepare an extensive financial projection model that shows all the variables that drive growth.
For example, if you raise $3M, how would that affect your growth? What if you raised $6M instead?
What prior successes does your management team have?
With most early and growth stage investments, investors are betting on the company leadership just as much as the company itself.
What have the members of your management team done in the past that will help them succeed at this job? What skill sets do they bring to the table?
What is the use of the investment proceeds?
Investors want to make sure that their investments are going to good use. You should have a detailed use of proceeds ready to present to investors.
Will you have to raise more capital? If so, when and how much?
More capital raising = more dilution. Investors want to be able to factor into their investment decision their expected dilution over time.
What is your exit strategy?
In many cases, investors do not make anything on their investments until a company sells or goes public. Having a clear exit strategy will make an investor much more likely to invest.
Let us help you navigate the capital raising process.
We are always happy to discuss the funding and growth options available to a company. Please use the contact form below and a member of our team will be in touch shortly.