Becoming an investable entrepreneur requires so much more than simply having an incredible product or service. A prospective investor will want to be satisfied with a whole range of other factors before they’ll back your business, and what those factors are will largely depend on the nature of your business and the type of investment round you’re entering.
However, even though it’s impossible to predict exactly what an investor will ask you once you’re in the room (which is why it’s essential to be prepared and ready for anything), there are four questions investors will surely drill down into.
Four Questions to Prepare For:
1. What’s your current proof?
Does your market want what you’re offering, does it need what you’re offering, and will there be ample opportunity for your business to grow?
If you’re an early stage company going into an early stage round, you’ll be limited by the kinds of proof you can produce. It’s unlikely you’ll be able to dazzle your investor with customer numbers and conversion rates, and they’ll realise that, so hard figures won’t be what they’re looking for.
What they’ll be looking for is ‘proof of concept.’ They’ll want to be sure that your product is the right fit for your market, that you thoroughly understand your market, and that what you’re offering will meet the needs and expectations of your customers. They’ll want to see you’ve done your homework. The more investment you’re trying to raise, the more homework they’ll have expected you to do.
If you don’t already have paying customers and impressive growth metrics, there are many ways you can prove your concept to show the viability of your product or idea.
- Conduct Focus groups, surveys, and Q&As to get a clearer understanding of your potential customers and their pain points. Use these to find out how your product or service address those pain points to make their lives easier and why your customers will want to buy it. Customer feedback is arguably the very best kind of proof of concept because it shows you’ve engaged…