17 QUESTIONS INVESTORS WILL ASK
By Rod Alan Richardson
The odds can be against you as you approach the realms of free enterprise. Aligning yourself correctly in a market space with a market-driven idea is the first step to enhancing your likelihood of arriving at a successful outcome.
Assembling a good team of players and attracting capital is next.
Consider the following questions when you are looking for seed funding and startup capital. You will need to know the answers to these questions when you ask someone for money.
- What need in the marketplace have you identified?
- What is your business and how does it provide a solution to the need?
- How much money is spent in the market you're approaching?
- How does your business make money?
- How much money is your business going to make in relation to the market?
- How are you going to attract customers?
- What percent of revenues will you dedicate to your marketing budget?
- Who is the management team?
- Why is your management team qualified to do the job?
- Who is the competition?
- How much money does each of your competitors make?
- What differentiates you from your competition?
- How are you going to beat the competition?
- How much money are you raising?
- What are you going to use the money for?
- What and when is the exit?
- How much do the investors get?
As you strive to answer these questions, you will find that it can be very difficult. You will notice quickly where your inadequacies lie. Money mainly wants to know how it gets paid back and your job as an entrepreneur is to illustrate how that happens.
I remember the first day I tried my new knowledge about how to present a deal out on a venture capital group. I had been mentored by a fabulous capital raiser. Using his method of clearly painting the picture of how the money makes money, I secured a $1 Million subscription agreement in 5 minutes… it only took 12 months of preparation and relationship building!
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