When startups want to grow faster, they usually approach possible investors for funding. Financing rounds more or less depend on how fast your company is growing and how much money you get in each of these rounds. However, the most difficult part is answering questions from venture capitalists about your startup during your pitch. It is therefore important that when you go to look for funding, you master all of the following:
1. About the company
Investors will want to have an overview of the company seeking financing. They will want to know things like what the company does, what’s unique about the company, what problems it solves, where the company headquarters are and how big the company intends to get.
2. About the market
This is another important detail when it comes to interviews with venture capitalists (VCs). What you are looking to do while answering questions about the market is to assure the VCs that the market is huge, growing and will probably be worth several million bucks in 5 years or so. You should expect to answer questions enlightening them on what exact market the product is addressing, how you calculate sales in your industry, why your company stands a chance in the current market and what percentage of the market you intend to attain over what period of time.
3. About the founders and team
Mark Cuban has always said on Shark Tank that when he invests in a company he gauges whether the team and the founders are worth investing in or not. Suffice to say that to most VCs, a sound founding team is as important as any profits the company has made or will make. In this section, you should expect to open up on issues about how many members you have in the team, why they are the ones uniquely placed to reach the company’s objectives, their skills and expertise and how you plan to increase the number of employees in the short and long term.
4. About the products or services
Investors will want extensive information about your product or service. The first thing they are going to need from you is a very elaborate presentation that demonstrates how the product/service works. Other questions addressing why your product is unique, what lessons you have learnt while building the product so far, and what more features you plan to add will be asked during the demonstration or after.
5. About the competition
Any business under the moon has competition. Since there are few completely unique ideas in the world today, success depends on execution of the idea and finding something to give you an edge over the competition. The investors will want to hear how you plan to beat your competition, how your product is different from what the competition provides, and what gives you an edge. To sum up, the investors will expect you to have studied your competitors carefully and to know their prices, features and performance.
6. About intellectual property
This is very important information when it comes to funding. If you have innovated something the investors will want to know if patents were issued pursuant to the innovation. They will also want information on patents, patents pending, copyrights, trade secrets, trademarks and domain names. Assuring them that your company doesn’t infringe on any third party rights is also important.
7. About financials
Investors are keen to know if your company makes money or not. There is nothing as important to investors as money. Venture capitalists are interested in businesses that have found a sustainable model to make profits while catering for their expenditures. They will also want projections on how much money you will be making in the next year, two years or three years. If your company hasn’t reached profitability yet, they will be keen to know your projections on reaching profitability. Beyond this, you need to be prepared to answer other questions like the cost of making your product or service.
8. About Customer Acquisition
Venture Capitalists will want to know about the marketing efforts your company is currently engaged in and how much it costs to get one customer. The types of advertising you are doing will also come into question. You should also be ready to answer questions on your social media and PR strategy.
9. About risks
Venture Capitalists want to know what they are getting themselves into. They will need to be informed of any legal, regulatory, product liability and principal risks the startup faces. There will always be risks in any business plan.
Having all the above information at your fingertips will help you answer questions from any investor in a satisfactory way. Besides that, investing in public relations is also important if you want to boost your credibility as a brand and attract investors. Good public relations can position you as a thought leader with an innovative product which is worth investing in.
However, sometimes founders get overwhelmed when tasked with developing an exciting product and simultaneously doing PR for this product. If you’re one of those founders who would rather hire experts to take care of your PR so that you can focus on product development, then you should consider signing up with an agency like Pressfarm. Pressfarm is run by a team of PR experts who are skilled at generating publicity for brands across different industries. After years working with brands in almost every industry from tech to fashion and sustainability, and everything in between, we haven’t met a startup that we couldn’t help. Our PR writers are skilled at writing press releases which will capture media attention and spark a journalist’s interest in your brand. These writers also have years of experience developing engaging feature stories which will excite your target audience and inspire them to try your product. In addition, with our team of designers, we can develop creative media kits which will help you create a memorable brand image.
Beyond creating quality content, the team at Pressfarm is dedicated to developing an effective media outreach strategy to help you push this content out to the right people. To this effect, each client gets personalized media lists containing media contacts in their industry. Additionally, all our clients have access to our comprehensive database of over 75,000 journalists across different niches. With Pressfarm you can create content which will turn heads, connect with the right journalists to tell your story and finally generate the publicity your brand deserves.