Posted on by Gonçalo Costa
Pitch, specific issues
a little more on this topic
After showing the traditional questions most frequently asked by investors during a pitch, to be completely prepared, we gather the specific questions most asked by investors about the case under analysis in the pitch: idea, product or service.
1.1) How do you plan to start the process?
Through the question the investor evaluates the return on investment (essential factor) even in the face of risk (bet on an idea). The entrepreneur’s proactivity and attitude are even more relevant to a positive investor intention.
1.2) How do you plan to make money from the idea?
In such an immature process an investor is likely to abstain at this stage of investing; nevertheless, if the idea is revolutionary and is protected (patent) the decision may be favorable. Thus, the investor tries to understand the strategic process and degree of proactivity of the entrepreneur.
2.1) What is the stage of development?
As such, the investor wants to understand the product’s maturity stage, so a frank and prompt response is vital (prototype versus test product versus final product). The entrepreneur denotes technical knowledge of the product and the process (a sign of professionalism).
2.2) What are the key temporal moments?
If the problem has not been addressed, then the answer is similar. If so, it is likely that we are facing a prototype or product under test. As such, the prototype may indicate investor concern (too early to support). Referring to key time moments is synonymous with professionalism of the entrepreneur.
2.3) What is the objective (problem to be solved)?
The entrepreneur must clearly explain the technical characteristics of the product and its functions. Especially because the investor wants to realize the entrepreneur’s knowledge and professionalism.
2.4) To what extent is the product / service different from the competition?
By knowing the technical characteristics of the product and what are the differences from the competitors, the entrepreneur denotes knowledge and professionalism to the investor. Therefore, it is preferable to perform SWOT analysis and others, but understanding their limitations.
2.5) What are the barriers to entry for other competitors?
An investor wants to understand whether the entrepreneur knows the market structure and existing barriers (economic, technological or other). As well as, ways of dealing with the process (eg, patent). If there is a patent, the entrepreneur must immediately and its taxonomy.
2.6) What will prevent a competitor from creating a substitute product?
If an investor had not asked about barriers to entry, the entrepreneur must mention the patent (even pending) and its taxonomy. In particular, in retail or mass consumer products it is mandatory. This signals to an investor strategic orientation and focus.
2.7) What are the characteristics of the patent?
This time the investor’s goal is to understand the patent (geographic orientation) and taxonomy, as it is representative of the entrepreneur’s strategic vision and knowledge.
2.8) How do you plan to make money?
The investor wants to know the strategy to approach the market and how to sell the product / service (own structure versus existing channels), such as licensing. With this, the investor gauges the entrepreneur’s degree of knowledge and his strategic vision.
2.9) Have you talked to these companies (related to the licensing hypothesis)?
If the entrepreneur includes the licensing option previously, then he must mention whether or not he made contacts and how. This denotes knowledge and result orientation (focus), characteristics appreciated by investors.