You need to know your business inside out before you even start thinking about looking for investments. But even if you’ve got a grasp on the numbers and the market, there are some questions that can still stop you in your tracks. Investors may very well ask you questions you consider very personal or even very odd when considering putting money into your company since they want as much reassurance as possible that you’re going to be a success.
- Why won’t Google (or the best known company in your niche) do it? One of the biggest concerns is that some company with an established reputation and more money to throw at a problem will start competing with you. It isn’t enough to be able to compete — you’ve got to be able to show how you won’t get crushed by the big kids.
- What does success with this company look like to you? Money is one thing, but what you personally want to achieve probably isn’t measurable in dollars and cents. You need to be able to discuss what the end game is for you, even if you expect that success to take you awhile to reach.
- How much of the company’s operations depend on you as an individual? For a truly secure investment, the company’s founder should be replaceable. If you were down for a month with pneumonia, your investors want to know that someone can be brought in to keep things moving along in the meanwhile.
- Who else have you spoken to? Many investors want to see confirmation that they’re doing the right thing and knowing that their peers are also looking at your company serves as proof. That can make it work going after your ideal investors first, especially if they’re big names.
- Are you planning to start a family any time soon? Women are more likely to get some sort of variation on this question, unfortunately, but it can come up in multiple ways. Investors want to know that you aren’t going to have any distractions after they hand you a giant pile of money.
It doesn’t hurt if you can tack on an answer about why the investor you’re talking to is perfect for your company, either. If you can bring up the fit between your company and the investor in front of you before any questions can be asked, you’ll be ahead of the competition.
Image by Flickr user Alexander Henning Drachmann