Questions a Funder will Ask ?!?
compiled by Peter/CXO Wiz4biz 1/14
You probably don’t have enough $$ to fund yourself, so you need to get outside sources – Angels, VCs, Banks. Who ever you talk to, may ask some or all of these Questions.
Q1. What’s your Credit History?
Don’t expect $$, if you have Creditors waiting for you to pay.
Q2. What’s your Collateral? [Damage – how will it hurt you to get $$ ???]
Of course, it’s easiest to get $$$, when you don’t need it, because you’re in good shape & look great. What Assets can you offer as security? Expect in tuff Independent Appraisal.
Q3. Am I Investing in you or in your Organization? Some deals are made on the basis of the “successful” past experience of you & your Team. If you & members of your Team have demonstrated talent, passion, & drive, the Funders will feel more confident, that you could do it again. Other Funders, look at the risk/ reward potential based on the strength of your innovative product or useful service. Sometimes, it’s a combo of both approaches that works best.
Q4. How complete is your Executive Summary & Biz Plan? What do you need the $$ for? What’s your competitive advantage? How are you going to Market? What’s your Financial Status for the past few years? If you’re just starting, what is your potential ROI?
Q5 What are your Competitive Threats? a) competition’s Weaknesses, b) Barrier to entry by others, c) Vulnerabliy to a strong attack?
Q6. Can your Team execute? How have they succeeded in the past with another Startup? Do they have the Talent & experience? Do you have all the functions you need, covered? Do you have a Backup Plan, if some of the Key Players leave? Do you have Key Man insurance?
Q7. Do you want an Investor on your Board? Investors often want to monitor, have a hand in their Investment. Besides, they usually bring much needed experience + lots of contacts – that are both useful to your organization.
Comments: Are there any other Questions that Investors typically ask?