99 questions investors ask female founders

Any serious female founder that wants to scale their business will be thinking about the funds they need to get there. Often that involves getting external finance from investors, in return for equity.

The truth is that investors are usually looking for a reason to say ‘NO’ whenever an investment proposition comes their way. So, it’s critical you understand where an investor might see risk in your business and address their concerns up-front.

Whether you’re considering angel investment, crowdfunding or any other route to early stage funding, these 99 questions are the ones that any investor worth their salt will be asking before they put money into your venture. So, head them off at the pass, and get prepared in advance.

Vision

1.   Why are you in this business?

2.   What journey have you been on that has led you to launch this start-up?

3.   What personal connection do you have to what it is that your business is doing?

4.   Why you and not somebody else?

5.   Do you have what it takes to be a great entrepreneur?

6.   What do you personally want to achieve with this business?

Problem

7.   What problem is your product or service solving?

8.   How does your target market experience this?

9.   How acute or pressing is this problem for your target market, and what evidence do you have to support this?

10. Why is this a big problem for your target market?

Solution

11. How are you solving the problem you’ve identified?

12. What are the benefits your solution?

13. Why is your solution the best way to solve the problem, and what evidence do you have to support this?

14. Does your solution completely solve your target market’s problem?

Market

15. Is the market new, emerging, or already existing?

16. Is the market trend declining, stable or growing, and what evidence do you have for this?

17. How is the market segmented?

18. What is the total annual monetary value of your domestic market?

19. What other geographic markets are you targeting?

20. What is the total annual monetary value of your all target markets?

21. What is the demand for your product and what evidence do you have to support this?

Competitive Advantage

25. Who are the key competitors in your target market?

26. Do a few players dominate the market, or is it fragmented?

27. How rapidly are your competitors growing? How entrenched are they in the market?

28. What is your unique selling proposition (USP)?

29. What does your business have that nobody else does (technology, processes, quality, cost, contacts etc.)?

30. What are the key benefits of your solution versus your competitors?

31. How quickly could a competitor copy your offering if they wanted to?

32. How do you plan to maintain your competitive advantage over time, so that your customers will stay with you rather than switch to a competitor?

 

Customers

22. Who are the early adopters of your product or service?

23. What is the profile of early adopters (age, location, size of business, position, etc.)?

24. How well do you know your target market?

25. What are the target follow-on adopters of your offering?

Business Model

33. How does your business make money?

34. What is the pricing of your product or service? How have you determined the price point?

35. Is your product or service offered as a one-time purchase or a subscription model? Why?

36. Are any types of discounts, rebates or free trial periods in operation?

37. What is the lifetime value of a customer?

Route To Market

38. What does your customer journey look like?

39. How easy is it to identify and contact your target market?

40. What are your distribution channels?

41. How much support (technical, training etc. is needed to get a new customer up and running?

42. What marketing activities are you undertaking to generate leads and conversions, and why?

43. How long and difficult is the sales cycle?

44. How do you manage your pipeline of leads?

45. What is your sales forecast for the next 12 months?

46. What is your Cost Per Acquisition Cost (CPA)

47. Is there a delay between your costs and the revenue you earn from a sale?

Traction

48. How many customers do you have?

49. What is your monthly revenue from these customers?

50. What are your customer and revenue growth rates?

51. What are your repeat purchase / usage rates like?

52. How engaged is your target market? Do you have any data to show strong engagement through marketing and/or social media campaigns?

53. Do you have any strategic partnerships that will help you achieve your goals?

54. Have you received any press coverage?

55. How else have you generated excitement in your start-up and momentum in its growth?

Intellectual Property

56. What patents, trademarks, copyrights, domains, and trade secrets do you have covering your technology or product?

57. In which markets are they registered?

58. Is the company’s logo trademarked? In which countries is it registered?

59. If you do not have a patent or trade secret protection, who owns the Intellectual Property? Do you have a license to use the technology?

Team

60. Who are the founders and what is their background/experience? How will this help the business to grow?

61. What is the ownership structure of the business?

62. Is your management team complete or are you still recruiting? What gaps do you have in your management team’s ability and experience?

63. How many employees does the company have?

64. What key recruits do you need over the next 12 months?

65. Describe your company culture.

66. Do you have a Share Option Scheme in place?

67. Who are the key advisors helping your shape the strategy of your startup? Have they invested?

68. Who are the members of the Board of Directors and what is their background? How are they compensated?

69. Who are the key professionals (lawyers, accountants, etc.) working with the business?

Finance

70. What have the revenues, costs, gross and net profits of the business been in the past?

71. What are the financial projections for the next 3 years?

72. What is your burn rate for the next 3, 6 and 12 months?

73. Is the company profitable? If not, when do you expect to break even?

74. What are your operational overheads and how do these break down?

75. How long can you continue operations before needing more funding (your runway)?

76. How has the business been funded to date – funds raised, timing and from whom?

77. What is the breakdown of your capitalisation table?

78. Do you have any debt? If so, what are the terms?

Risks

79. What are the key risks that could undermine your success?

80. Are there existing or potential regulations that could limit your ability to operate?

81. Would a breakdown of your existing supply and/or sales chains disrupt your ability to deliver?

82. What is the likelihood of the risks materializing and how big is the potential impact if they do?

83. How will you mitigate against these risks?

84. Who is responsible for each of your mitigation strategies?

Investment Proposition

85. How much money are you looking to raise?

86. When do you plan to raise this money by?

87. How will the funds be used and when will you spend the money?

88. What milestones will this let you achieve?

89. What length of runway will this provide?

90. What is your pre-money valuation and how have you determined this?

91. Are you offering equity, or a convertible note or something else? Why?

92. How much equity are you offering on this round?

93. What are the main terms?

94. Do you expect to have further investment rounds?

95. When do you expect to exit the business?

96. How will you exit the business?

97. If you plan a trade sale, who are the likely buyers?

98. What are the key drivers of the future valuation of your business?

99. What multiple returns do you expect to make?

 It's a lot to think about!

If you'd like to road test how you'll answer these questions with investors, we're here to help. Book a Discovery Session and we'll go through it all together.