Is Your Startup Prepared for a List of Venture Capitalists Questions?

Entrepreneurs are people with ideas that could change the world. They are insightful, innovative, and courageous enough to follow their passion. All they require is some financial support, and Venture Capitalists are the ones they resort to.

An innovative idea is not the only thing it takes to build a successful business. You have to analyze other aspects as well. You will need to formulate answers to a list of questions that venture capitalists are going to ask when you pitch in your business idea to them. No matter how innovative your ideas are, if you are not able to answer the questions they ask, you will not be able to convince them.

We have jotted down some key questions based on different aspects of business development that you might face while convincing an investor to invest in your startup.

To start with, one of the most important questions is why should they invest in your business idea? You may have heard the quote, “The first impression is the last impression”. Now is your chance to create a fantastic first impression. Convincing them to believe in your idea is what you must do. Some of the follow-up questions that might arise while responding are:

• What is your company all about?
• How is it different from other companies?
• How does it add value to people’s lives?
• Which problems are you focusing on solving?
• How big is the market opportunity for your business?
• What would be the growth plan/rate?
• Where are you planning to setup your business?

It takes a team to build a successful business while maintaining peace of mind. This can happen only if you are distributing the tasks efficiently and are not keeping the entire burden on yourself. Investors are aware of this, and if your team is not dedicated, passionate, or have the relevant domain experience, they will not invest in it. Some questions that are asked about the team you have are:

• Who are the founders and co-founders?
• Is the team experienced in the relevant domain?
• How can the team be improvised in a short period?
• How is the team best suited for this business plan?
• How many employees you have, and how were they selected?
• What is the source of motivation for the founders?
• How will you keep your team motivated?
• How are you going to scale the team over time?

Competition is what makes you put in extra effort. Every business has competitors trying to provide better services. How will you manage your business during this phase? Some more questions based on the competition include:

• Which companies do you see as your competitors in the near future?
• How are you better than your competitors?
• Where do you think you are lacking when it comes to moving one-step ahead of your competitors?
• How are you better in terms of pricing, features, and performance?
• How long would it take you to make an impact on the market?

The market is your playground and the actual place where your success and failures are scrutinized. If you stand out, your work is already halfway done. Therefore, you will see a lot of questions based on your market strategy and some of them are:

• Which market are you targeting?
• Which markets are you planning to acquire, and how much time it would take to do so?
• What is the sales and growth rate of your company?
• How would your business grow?

Your services and products speak louder than you do. What you are offering is what brings more customers and growth to your business. Therefore, compromising the quality of services and products should be avoided at all costs. The funding organization will invest in your business if the services and product(s) are promising enough, which they will analyze by asking you the following questions:

• Why would people spend their time exploring your services and products?
• Where do you see your products and services one year from now?
• What makes your product stand out in well-established markets?
• What were your weak points in early versions of your products and services?
• Could you convince us to use your services right now?
• How will you enrich your product and services with features over the next few months? The next few years?

If you have answers to all these questions mentioned above, you are good to go! Pitch your business idea to Capital Ventures. However, if you are missing answers to some major categories out there, we suggest analyzing your business plans and resources to try to find answers to all these questions first, and then knock the door of an investor to make an impact.

We know that it is not possible for you to do everything on your own. You will need assistance and support from a mentor. You should talk to one of our startup solution assistants and who will be happy to guide you through every step to turn your startup idea into a successful business.