Posted on by Gonçalo Costa
Pitch, traditional issues
more information, because there's a lot to say
Regardless of the intense process of preparing a pitch, an entrepreneur is usually not completely calm! This adrenaline can be:
i) positive, essential for the emotional connection to the investor;
ii) negative, removes the serenity and assertiveness in the presentation and response.
So, in order for adrenaline to be positive, we show the traditional questions most asked by investors to be completely prepared.
1) How did the idea come about?
An investor is usually interested in the origin of the idea / product / service associated with the business, as it may reveal:
i) a market gap;
ii) a different view of the market;
iii) inspirational moment of the entrepreneur.
A good story can make a difference (emotional connection) and can demonstrate the entrepreneur’s creativity and proactivity.
2) What is your business?
The answer presents infinite possibilities, as it depends on the business segment and stage of maturity (idea / product / service). However, the common denominator is for the entrepreneur to fully understand and explain the business (a symptom of professionalism and clarity).
3) Who are your competitors? How different are they?
The entrepreneur besides the business must know the competition and its added value; and, for that, you can explore the SWOT analysis and others but understanding its limitations. This is understood as professionalism by the investor.
4) What is the sales volume so far?
The existence or not of sales depends on the stage of the business, but in 90% of cases it is a bad sign for the investor (exceptions below). This is because it denotes a lack of proactivity and resilience on the part of the entrepreneur.
5) Why is the team ideal for the project?
For an investor to choose between a good team in an average project or vice versa the decision is simple: the first option. The role of the entrepreneur is to clearly explain the areas of intervention and path (professional or academic) of the elements. Remember: a true leader knows how to surround himself with the right people!
6) What marketing strategies to adopt? And associated budget?
The entrepreneur must explain goals and strategies for approaching the market in a clear way, so, this will be seen by the investor as positive (knowledge and professionalism of the entrepreneur).
7) Are you aware that you are underestimating your marketing budget?
This does not mean total disagreement by the investor if he has asked the subsequent question, but intends to assess the entrepreneur’s proactivity and creativity. A professional entrepreneur will know how to discuss options or hear proposals (important factor – knowing how to listen).
8) What are the average numbers of competitors or similar businesses?
If the entrepreneur has a professional attitude, he will know the global value and quotas, since the definition of goals, objectives and strategies depends on the knowledge of this market. And, this will be recognized by investors.
9) How did you establish the assessment? Why this value?
The investor wants to understand the economic assumptions and their level of “realism”, which is probably the core issue of the pitch. It should be noted that the answer is case by case, and the entrepreneur must be clear and professional in the explanation.
10) Why the need for an investor?
As a rule, the investment serves to:
i) product creation;
ii) project launch;
iii) business expansion (eg, marketing, clinical testing, etc.).
Clarity is essential even for the investor to understand the entrepreneur’s strategic vision.
11) Have you already presented the idea / product / service to other investors? And, they were interested
When the entrepreneur / project generates interest, investors measure the risk of overvaluation versus anticipation; or, if the answer was negative ex-ante, explain why (eg, an investor who values other businesses). In both cases, the entrepreneur must be professional and resilient.
12) How will they invest the money invested?
As this typical question the investor wants to know what the entrepreneur’s strategic orientation is, and clarity is fundamental for this understanding. Professionalism in the sense of recognizing analytical error or considering suggestions mentioned by the investor.
13) How do I receive my money or earn?
An entrepreneur must be prepared to present different options to the investor (exit strategy), as well as explaining how to make the return on his investment or, on the threshold, not losing money. This behavior will be synonymous with professionalism and preparation.
14) What is the speed and scalability of the business with the investment requested?
Investors try to understand the impacts of the investment and the realism of the entrepreneur’s options. In this case, professionalism is crucial to know the different interactions and consequences of the investment.