Hi, everyone. This is Alejandro Cremades, and today we’re going to be talking about
questions investors will ask you after reviewing your pitch deck. Before we get started, make
sure that you hit that Subscribe button, and this way, you will never miss out on any of
the videos that we roll out every week. There’s a lot of work that goes into putting
your pitch deck together. You really want to put the best foot forward. In today’s
video, we’re going to be covering every single thing that is really critical when
you get in front of investors, when you’re getting asked all these questions, and when
you need to address those questions and concerns in the most powerful way. Again, we’re going
to give you this actionable, step-by-step process with all the insights, and with that
being said, let’s get into it. How are you different? You need to do that
SWOT analysis so that you understand what makes you different and stand out from everyone
else because remember: those investors, for the most part, are also meeting with your
competitors. They’ve done their research on the market, and there are certain concerns
that are separating them from actually placing that investment, or maybe even investing in
your company or in a competitor’s business. Here, you want to understand what is making
your business different that is going get them excited to actually put their foot forward
and make an investment. That’s why a SWOT analysis is very helpful.
They could also ask you about a time where things didn’t pan out the way that you expected
them to be. What this means or what they want to see is how you’re able to execute over
time because, at the end of the day, you can have the most amazing idea, but an idea counts
for 5%. Execution accounts for 95%. The market is going to be throwing you obstacles,
and you’re going to need to be good enough to adapt to those obstacles. For that reason,
your skillset, your expertise, and how you’re applying those to execute on your 18 to 24-months
roadmap is going to be absolutely everything. Here, you want to know about a previous experience
or event that happened, and you can actually walk them through it. How you thought it was
going to go, how it ended up going, and how you put a correction in place so that you
could get to a positive outcome. Are you willing to move? This is another one.
The investors like to be hands-on. They like to participate. They like to sit on the board
so that they can not only represent the investment but also those people that invested in their
fund, so that way, they oversee what’s happening on their money. They’re going to want to
be on the board. They’re going to want to help you to bring their network, or whatever
that is, but help on the strategy that is going to then be executed by the management
team and the team. In this case, you need to show them that you’re
coachable, that you’re willing to bring them on, to work with them, and to listen
to them. That’s going to be really important for the investors so that they know that they
can make an impact, they can make a difference, and they can oversee what’s happening with
their own investment. What do you want to do with this? That’s
another one because your why is everything. In the first place, why did you come up with
this idea? How did you come across that frustration? How did you think about bringing that frustration
to life, and in a world where you could switch it off and switch it back on again, and you
were five years ahead of time. What does that world look like?
What does that world look like if your vision was fully realized, and you need to walk the
investor through that with the same colors that you’re having in your own mind? Don’t
be afraid to walk them through that why, and again, to help them see that future with the
same colors that you’re painting in your canvas inside of your own mind.
Why do you think you’re uniquely the best to execute on this idea? That’s another
one because it’s all about your expertise; it’s all about your know-how and how you’re
able to apply that for the execution of the roadmap that you have in front of you. The
investor wants to know because they’re investing in you, they’re investing in your team,
and they want to make sure that you have the right people seated on the right seats of
the bus because you may not know your direction. If you have the right people seated on the
right seats of the bus, eventually, you’re going to find that direction toward success.
And that’s the reason why they want to understand what makes you unique, what makes you the
one, you and your team, to execute and to get their money in so that you can take things
to the next level? You want to walk them through your experience, your team’s experience,
and how that applies to this specific journey where you’re inviting them to be a part
of. What is your marketing plan? This is a tricky
one because typically, what people say is, “Well, we’re going to be using Facebook
Ads, LinkedIn Ads, Google Ads. That’s the typical thing. Anyone can do that. Even a
monkey can actually raise money to deploy it in those types of channels.
You want to be able to show the investor that you have something unique, a unique channel
that you have access to. It could be business development deals; maybe you’ve developed
an expertise on SEO or content – something that organically is going to attract the customers
that are interested in your product or service without having to put a substantial amount
of money in order to deploy. They like that organic growth, and you need to identify what
your unique advantage is, your unique competitive advantage that is going to give you an edge
over those other competitors that perhaps are just thinking about deploying money in
Google Ads, Facebook Ads, or LinkedIn Ads. You need to be different.
Who needs and must have your product or service? At the end of the day, as human beings, we
only have a certain amount of time and a certain amount of attention to use certain things
or buy certain things, so you want to walk the investor through the actual reason why
customers need to have either your service or your product for whatever problem that
they’re coming across, and you need to walk the investor in a very clear way as to what
that looks like, what is your addressable market, and how you’re going to be getting
in front of this. What feedback have you received so far? Many
entrepreneurs make the mistake of just having an assumption, having an idea, thinking, “This
is going to work. This is going to be beautiful,” and then they put it to market, and then it’s
a flop. That’s why you don’t want to build your company based on assumptions. You want
to build your company based on data that you’re capturing from either customers or potential
customers. Never think about launching an initiative
without capturing those data points, whether it is via a quantitative approach, where it’s
data that you’re getting from the usage of your product or your service, or a qualitative
approach, which is essentially you getting on the phone with all these people that are
customers or potential customers. So, this is your time to shine. This is your time to
walk the investor through all the great data points and the feedback that you have been
receiving from your customers or potential customers that are waiting to purchase your
product or service. How have you funded your business so far?
They want to know how you were able to maintain the lights on. Who financed this thing? Here,
ideally, you can tell them that you’ve invested a certain amount. Maybe your family also pitched
in a little bit so that they can get to see and feel the commitment that you have for
the long-term success of this company. When they don’t see that you have skin in
the game is probably going to be a turn-off, so they want to know that you’re in this
for the long-run and not just to make a quick buck and that there’s actually a necessity
for you to be able to succeed because your own money is in or your family money is in.
How many months of runway do you have? This is a question they want to know because runway
is how much time you have for the business, as a plane to take off before you’re actually
running out of runway, and you’re going to go and crash?
Here, typically, you want to give yourself anywhere between six to eight months of runway
before you’re actually engaging with investors. When you have less than six months, the clock
is ticking; they’re probably going to negotiate you down, pull some tactics that are not really
nice. So, the more you have, the better – the better for your conversations.
I think that you never want to hide the runway that you have. You always want to have integrity
and honesty and come across authentically with whatever that is, whether it’s three,
four, five, whatever amount of time that you have left with money in the bank to cover
cost. Who else has committed to invest in this round?
Or who else are you speaking with? They want to know who else is potentially looking at
it and who is interested? I always say that investors are like sheep. They go where everyone
else is going. You’re going to find that you’re in the sea with all those sharks
around you swimming. Then when one bites, everyone wants to bite.
What you want to do is to be smarter than them. You don’t want to disclose names.
You want to talk about the interest that you’re getting and some of the ongoing discussions,
but without going too deep into it, or perhaps, disclosing the names, or otherwise, they may
use that against you. The less information around this, the better so that you can create
that sense of urgency, fear of missing out. If I don’t jump in, someone else is going
to jump in. The venture world is very small. All of the investors know each other, so you’ve
got to be very careful with this. Hit a Like to this video. Subscribe to the
channels so that you don’t miss out on all the videos that we’re rolling out every
week. And leave a comment below and let me know what you’re up to and some of the questions
that you’re getting from investors, as well. If you’re raising money, shoot me a note
at alejandro@pantheraadvisors.com. I would love to help you out with your capital raising
efforts. Thank you so much for watching.