If you do not have any bootstrap, you’ll likely need to get investors on board to help fund your business. While you are considering getting the investors on board, you should prepare for the sort of questions they are likely to ask. Most investors take a look at passion and knowledge, not just good business pitches. They tend to look for clarity of purpose and at the same time look within to see how you are prepared to achieve everything. Having this in mind here are a few questions you ought to prepare to answer.
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Tell investors about your product and services
When you stand before your investors, you should remember that your product should reflect your desire to change your industry. This means your product should be presented not as just a product but let the investors realize you are out to make changes. Also, as an entrepreneur, you should be able to do an elevator pitch for your investors. Your pitch should state categorically how your product is different from others in the market. There should also be clarity of purpose in your pitch, and raise the plans put in place to build your vision.
Who are your teammates?
A team is the potential to gain the attention of investors, thus, instead of talking about the market potential of your products alone, reflect on your team too. You should have a skilled, knowledgeable, and competent team and present them in your pitch. Everyone is aware of the fights among founders and so investors will always love to know if your team is cohesive or not.
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Therefore, talk about how much the team stays and works together, as well as how disagreements are handled amongst them. At the same time present your team as ones bonded deeply and authentically committed to the vision of the business.
Discuss your obstacles with investors
Setbacks and obstacles are inevitable in businesses so when you are presenting your success stories, do not forget to tell the obstacles too. By highlighting those obstacles to your investors, you will share how you overcame them too.
Investors are keen on hearing how you fell, rose, dust yourself, and tackled the problem. Give them the right view of things but do not get obsessed with those obstacles. Let them know you maintained a laser focus on the goals regardless of the challenges.
Do you know your competitors?
When you know your competitors well, you are in a better position to have command over your business and the market. It’s worthy of note that investors love disruptive businesses. In reality, you will always have competitors no matter how disruptive your business is.
Understand that your credibility will be questioned if you do not have a thorough knowledge of your competitors, markets, and opportunities. While giving your pitch, give concise details on how your product is different from the rest. If you can, highlights these differences among each of your competitors, and make sure they are specific and not vague. Allow your investors a peck into the roadmap that will pull your business ahead of your competitors.
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Share your financials and business model with your investors
You have to answer the question about your finances and how your business model is structured in your pitch. Always be reminded that each of your investors is only willing to invest in ventures that will provide healthy returns.
Discuss your business model and financial structure at length with the investors. Provide a detailed monthly financial plan that covers the first 18 months, as well as your strategic plan that will accommodate your quarterly financial model. This record could have such a financial model that expands for at least the next three years. Be aware of their checklists which constitute business potentials, market sizes, uniqueness of your products, and finally potential returns.
Research your investors thoroughly
You might be blinded by the fact that you need funding to propel your business forward and you forget this part. This is as important as the funding you will receive if your pitch is successful. First, your investors should be inspired by your dreams. Secondly, they should be those who will be supportive and collaborative. Finally, look out for investors who will share your beliefs in all possibilities.
In conclusion, do your due diligence, research potential investors carefully, and clarify if they will be a good fit. Do not schedule a meeting without doing this, it’s of necessity for the growth of your business. When you research your investors, it will give you an edge in the pitch. Knowing fully well the kind of ventures they love to invest in for example will help you try to put your business in that mold. This will help you make a good impression and you might likely be accepted for funding.