Raising capital is critical to the sustainability of your company. If you’ve got big ideas but don’t have the resources to execute them, you’ll have to partner with investors and VCs. There are several things that investors are looking for when they listen to a pitch. Some investors might ask you questions that are uncomfortable, but need to be answered. If you’ve been struggling with raising investments for your company or have never had a meeting with an investor before, here are some questions you will most likely be asked.
1. What problem does your product solve?
There might be several other products or services that do the same thing that you do. If you want to attract your investor‘s attention, you will have to position your product and service uniquely in the market. Create a pitch where you describe what sets you apart from your competitors.
2. What does your product do?
Convincing your investors of the existence of a market opportunity is just one part of the puzzle. You’ll have to explain to them exactly what you are offering to your customers.
3. Who are you working with?
Your investors might like your idea, but if they aren’t sure about the people on your team, they will be less likely to give you money. You have to sell your team and highlight the unique skills they bring to the table.
4. How will you convince people to use your service?
Your investors will need to know how you plan to launch and distribute your product. If you have some results from a test run, use it as a part of your pitch.
5. What is your revenue model?
Some entrepreneurs might be uncomfortable talking about the specifics of their financial strategy, but it is absolutely essential for assuring your investors. You need to map out exactly how you are going to make money from your product in the short and long-term.
6. How much money do you need?
If you are asking for a certain amount of money, you have to let your investors know how you will use those funds. Create a breakdown of your resource utilization before you walk through the door.
Some of the above questions might be a little invasive, but you have to be prepared for them as an entrepreneur. Some investors might be more interested in your overall vision and potential than they are in the specifics. But for the times when you are asked these specific questions, you need to have a strategy in place. If you’ve got satisfactory replies for all of the above, you stand a much higher chance of securing the investment you need.