Preperation for Angel Investor Questions
What makes your business different and unique?
Two wrong answers
can be given to this question. A business for the
investor can be both well-known and original.
§ If it is well-known
business, worries about your life cycle can be begin in this case.
§ If it is an
original business, the investor can worry about the lack of product claim this
time.
Why would someone have to buy your product or service?
What are your needs for your product or service?
Investors are looking for the business models
which can be prove the demand of their product and services in the market. Is
your product something your buyer needs?
Or was it just good to have the product? If
the last-mentioned categorization is entered, it will be a big help to show how
you will be interested in your product. According to the market movement, it is
critical that people demand this product.
How do you understand that your business has a high
growth potential?
Investors want to know how to estimate your
earnings. They want to see fast scalable growth opportunities. Therefore, you
should show them how much they will invest in the near future. Be prepared to
explain in detail how you estimate your winnings from the market potential.
What makes your management team capable of doing
business modeling?
You know that the most important thing in
private capital is management. Investors are looking for three issues in
management: experience in business building, experience in the industry (or
experience in the business) and strong character. What does strong character
include? Investors want managers to be able to explain and demonstrate their
work with high energy or passion, be resourceful, honest, patient and riskier.
It is also important that they are modest. Because sometimes the founders
should let the people who have more experience to manage the company.
Who are your competiters?
You've heard the warning 'never say never. In
answer to this question, it is better if you do not say 'I have no rival'.
Obviously, investors want to know the size of competition that your business
will face and how your company will show the difference. But they may want to
measure how mature you are as a business man. The answer 'I have no rival' is
not true. Because your business will always have at least 2 competitors.
Potential consumers can continue to function without purchasing your product
(using backup - less effective), or consumers can do nothing (prefer not to use
the product or service). Moreover, if the investor is aware of the other
competiters you do not know, they can lose faith in your ability to manage your
business. Be prepared fort his situation.
What gives your company competitive advantage?
Investors are wondering how you will be
superior to your competiters. This is not just the superiority of your current
competiters. They want to know how you think about future entrepreneurs and how
you will take them away from you. 'The advantage of the first move' is a rarely
sufficient answer to this question. What makes your company unique and
different?
Does the company have intellectual property rights
such as patent, trademark and copyright?
Trademark and copyright are important to
protect the company's intellectual fortunes and brand. In addition, investors
will want to see that you have taken proper steps to protect the intellectual
capital of your company.
How will you balance your company's income and cash
flow?
Do you remember the first time you were
financially independent of the family? Your income exceeds your expenditure but
you do not need more support. The concept is the same here. If you are
financially independent, investor will be less responsible than you. Of course,
the main purpose is to reach the exit strategy quickly. Profitable businesses are
more attractive to potential consumers and the public market.
How do you plan to win customers?
A well-developed business model includes
market realities and marketing strategies that show that they understand
consumer behaviors. Investors are more concerned with marketing
entrepreneurship. You can expect such questions: What is the company's spending
on getting customers? Have you calculated the targeted earnings per customer
and the average earnings? Do you know how many customers are required for the
profit ? Do you know the sales cycle of goods?
How do you plan to keep customers in your hands?
Most successful companies always seem to have
plans to keep customers in their hands. They have plans to keep them in their
hands without having more customers. Doing business with a new customer is five
times more expensive than doing business with an existing customer.
What provides customer satisfaction in this sector and
in this market? How do you know these things?
Have you done any research to determine what
really matters to your customers? Do you know which properties of the product
are important to the auxiliary products? When you have a new customer, you must
ensure that customer satisfaction is maintained and understand their changing
needs. Have you considered how you will support your product and the costs that
will be incurred with this support? Will your existing customers re-purchase
your product or service? Will they recommend it to others? The opinions of your
current and active customers about your product or service are very necessary
to answer these questions.
Who is the final user of your product or service?
Is this a customer-focused business or will
you sell your product or service to other businesses? Do you know what is the demand for your product or service on
the target market? What do you know about the buying habits of the target
market? Knowing the answers to these questions will be important when talking
to investors.
What contracts or partnerships were included? (Ex:
partnership and marketing, licensing, sales / distribution, software contracts,
etc.)
It is important to remember that contracts can
be financial liabilities. Investors want to know whether contracts cover your
claims for intellectual property and whether your company has unfulfilled
obligations for third parties. Has any one of the contracts ever given you a
competitive advantage? Did you create an entry barrier? Did it help you to
reach the customers?
What is the project period for the product or service?
What are your current and future plans for research and development
investments?
Every good thing has an end. The products are
improving, competitors are offering substitute goods and customer demands are
changing. Do you foresee that the product will keep its natural flow of profit?
What are your plans for research and development investments? How will you get
benefit from existing products?
What will you grow your team?
It is difficult to find the best employees
when the recuitment conditions change. Investors are interested not only in the
current workforce, but also how you fill the positions in the future. Have you
used an administrative research team? How will you balance, attract and
motivate people? How will you get the workers while keeping the labor cost
under control?
What are your possible exit strategies?
There are two exit strategies for a successful
investment: acquisition and public offering. Lately, these two field activities
have decreased. Investors want to know how to earn income from their
investments. As a result, exit strategy is important. As an entrepreneur, you
need to consider who can buy your business in the future. Be realistic and
creative in terms of timing and evaluation.
How to use income?
Investors want to know that how to use their
money in a good way. Get ready to present the timeline. You need to analyze how
the money is going to be spent and specify what you need to successfully
complete it.
| ANGEL INVESTMENT FORM | |
| COMPANY NAME | |
| INDUSTRY | |
| LOCATION | |
| FOUNDED YEAR | |
| NUMBER OF EMPLOYEES | |
| INCORPORATION TYPE | |
| WEBSITE | |
| Company Summary | |
| Customer Problem | |
| Products & Services | |
| Customer Segments | |
| Target Market | |
| Competitors | |
| Competitive Advantage | |
| Sales & Marketing Strategy | |
| Business Model | |
| Management Team | |
| Your revenue stage | |
| Current Funding Round (USD) | |
| Seeking ( Total Money ) | |
| Pre-Money Valuation | |
| Payment of funding schedule | |
| Management Team | |
| Your presantation | |
| Executive Summary | |
| BUSINESS PLAN | |
| INVESTMENT PLAN | |
For more informations :
https://en.wikipedia.org/wiki/Angel_investor
