When seeking funding for your business, no matter if you are still in the startup phase or have already established yourself as a prominent company, investors will want to know exactly what it is they are getting involved in, and how lucrative of a decision this may or may not be. Successfully winning them over will take more than just a well-prepared speech. You must be ready with clear answers to every question they have.
The questions asked about your business will typically be similar in fashion, but many could actually provide insight as to where you may be struggling at your current state. It’s best to write down every question you receive for both your company’s benefit, and to gain the trust of your investors through sufficient answers in future meetings.
One area of concern for investors is the opportunity for growth within your respective market. How big is your opportunity specifically, and how much market share are you aiming for? Having a clear view of the bigger picture (and being honest about the possibilities), and how you came up with these projections can be very reassuring for investors, as it provides them with future insight as well. Similarly, being prepared to tell them exactly how long it may take to reach this goal is an important component as well.
Investors will likely ask more personal questions as well, such as inquiring about who you would like to model your business after, or who you aspire to be like the most. Another personal question may include why you chose to get involved in your given field. This is an opportunity for you to show your passion and instill faith in your investors that you are in this for the right reasons.
Another crucial area investors will want to know about is how much traction you have received at this point. How have you adjusted your strategies based on feedback you may have received in the past? In a similar vein, has feedback been largely positive, negative, or neutral? Knowing how to re-strategize upon receiving expert opinions shows that you utilize constructive criticism as opposed to taking it as a personal attack, and are willing to change accordingly.
Continuing with the aspect of business traction, investors will also want to know more about your clients or customers, specifically how many there are, how long the tend to remain with your company, and your rate of growth. Has this growth been slower than average within your industry, or perhaps faster? How consistent is this growth? Understanding the industry’s trends is extremely important in order to adapt and remain successful.
Stay tuned for part 2 of my blog series on more questions investors will ask you upon seeking funding for your business!