Investors want a high-level overview of your business, so conversations with investors should not be hard if you know your business.
Conversely, one of the best ways to make sure you know your business is to prepare for conversations with investors (even if you
don't want to raise money).
I've raised a lot of money from investors, and have advised CodeDay alums who have raised a lot of money from investors, and I
listed some of the most common questions below. A good exercise for founders is to make sure you can answer each question in 5-15
seconds. If you can't give a quick answer it's almost always a sign that you don't really understand something important.
(I'm not an investor, so don't trust me blindly. Another thing I recommend to all founders is to fill out the Y Combinator
application, even if you don't want to apply.)
- What are you making?
- How does your product work in more detail?
- Can you show me a demo?
- Who are your users?
- What problem does your product solve for your users?
- How did users solve this problem before your product?
- How do you know your product works?
- What does your product roadmap look like? (Do you have a long-term vision which is different from what you do now?)
- How many users do you have, and how fast are you growing?
- How do customers find out about you / where does growth come from?
- If you have subscriptions, what is your churn?
- If you do sales, what is the cost to acquire a customer? How long does it take?
- What are your margins, and how will they change as you scale?
- Who are your competitors, and how are you different?
- If you say you have no close competitors, why has no one built this before?
- Tell me about your market? What do you know about this market that others don't?
- How big is this market?
- How big is this opportunity / how much money can you make?
- Who is working on this and what do you each do? (What do you actually do? Not a list of titles.)
- What motivated you to work on this problem?
- What makes you uniquely qualified to work on this problem? (What is your "unfair advantage?")
- What are the biggest weaknesses on your team / who would be your next hire?
- If you are looking to raise money, why? What are you going to do with the money?
(This mostly applies to early-stage investors. But if you are raising a Series A you're probably not reading this.)