During Pitch, Investors would ask you a lot of question before proceeding to invest in your business. Before you walk into an investor meeting or a pitch to present your startup brand, you need to know the answers to these likely questions.
1. Do You See This Brand Trending in the Next 12 to 24 Months?
This time frame will give the investor a good glimpse of the opportunities and the risks that could present themselves over both the short-term and the intermediate-term.
Because this is an open-ended question—and not a simple “yes or no” or one-word answer question—it allows the manager to give a broad response. Perhaps they will touch on a variety of issues that could prove valuable to the investor’s decision-making process.
2. Who Are the Emerging Competitors in the Industry in Which You Operate?
This question will let the investor know who the competition is or who it may be in the future. It may also alert the investor to new new ideas that may be coming to the market, which could impact the company at some point down the road. Consequently, management may also disclose plans on how it plans to deal with these emerging competitors.
3. What Part of the Business Is Giving You the Most Trouble Now?
The answer will identify potential weaknesses in the company’s organization and provide some insight in dealing with them.
Keep in mind that identifying problem areas are just one part of the equation. It is far more important to hear what the company plans to do to resolve the problem area(s) in both the short and long term.
4. How do you know how much money you need and could you scale your business with less?
All investors, of course, want to know how much money you need to scale your business, but you had better know: (a) what you’re going to spend it on (also called “use of funds”) and (b) whether you could scale your business with less money. If you could scale, how much less funding and what would you be sacrificing as a result? It’s actually a very good idea to have multiple budgets and financial forecasts developed in your business plan so that you can address three different growth models for scaling your business.
5. How can I connect with customers who have used your product or service?
If investors find your pitch interesting, they will want to begin what’s called the due diligence process. During due diligence they will ask a lot about your customers: who they are, how you know who they are, how you find them, what they think of your product, how they are using it, whether that matches your usage intentions, how you interact with them, etc.
At the end of the day, investors want to invest in leaders who are movers, shakers, creators, and have the ability to inspire others.
I’d love to hear the atypical questions you’ve been asked by investors—please post them in the comments!