Questions Potential Investors Ask
"The Market
* How large is the specific market for your product?
* What growth is expected in this market?
The Product/Production
* What, specifically, are the company's products/Services?
* How are they better than other products or alternative solutions?
* Are there patents? What, specifically, do they protect?
Competitive Positioning
* Overcoming Inertia - What will it take to get customers to change what they are using/doing today?
* Where will you fit into the industry?
Product Development
* What work remains?
* Identify major development risks or challenges.
Marketing and Sales
* Briefly explain the selling cycle.
* How will you raise customers' awareness of your product and stimulate buying?
* What channels of distribution will you use to deliver your products?
Leadership
* What is your background and previous experience?
* Where did the idea for the company come from?
* How did you get involved with the company?
* Who is presently managing the company? What are their credentials especially regarding ….
o Financial management
o Marketing
o Product development and production
Business Strategy
* Identify the steps needed to reach positive cash flow.
* How has the company been funded to date?
* What is the business model? (i.e. how will the company make money?)
* Do you have any corporate partnerships in place?
Financials
* What kind of revenues can the business produce over the next five years? Profits?
* How will the investor get his money back? Through an IPO? Acquisition? When?
Requested Funding
* How much capital is required to carry the company to the next stage?
* What is your current "burn-rate."
* How much hard-money (cash) have the founders put in?
* What are your startup or development costs?
* What is your projected three-year revenue stream?
* How much are you planning on investing?
* What do your projected expenses look like for three years?
* What are your three-year sales forecasts?
If you anticipate being acquired
* Identify the two or three most likely buyers
* Explain why they would be interested"
Read more in this excellent post from EntrepreneurBlog
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