A good presentation gets an investor interested. The questions that follow decide whether they stay interested. Investors use them to find out whether you really understand your business or have simply learned the script.
I’ve screened more than 30 pitches for Keiretsu Forum London. The founders who win the investment are the ones who are comfortable being put on the spot. They deal with the likely questions during their presentation, before anyone asks. They know their strengths and have prepared to defend them. The founders who have not prepared, or who feel uncomfortable being questioned, are the ones who need help.
Write down the questions you hope nobody asks
Those are usually the ones that matter, because they point at the weakest part of your case. Look hard at market size, pricing, margins, intellectual property, what you depend on to deliver, how much cash you need and the experience of your team.
Some of the questions I hear investors ask most often:
- Is there a real market for your product, and what is your evidence?
- Who pays, how much do they pay, and what are your margins?
- What makes you different from the competition, and what stops others copying you?
- How much do you need, and what will it achieve?
- How and when could an investor get a return?
Answer first, then explain
Start with the answer, then give the reasons. If you do not know, say what you do know, what is still uncertain and how you will find out. A long, defensive answer does more damage than saying plainly that you do not know yet.
So when an investor asks, “How do you know customers will pay?”, do not give a five-minute history of your conversations. Say, “Four customers are paying now. We have not tested higher prices yet. That is the next step.”
Practise under pressure
Ask someone to interrupt you, challenge your numbers and ask for clarification mid-answer. Hand them your list of uncomfortable questions and tell them to start there. Listen to the whole question before you answer. Pause. Do not rush to fill the silence.
Keep a record of the questions you are asked
If the same question keeps coming up, your pitch is not answering it. After each meeting, write down what was asked, then fix the pitch, the evidence or both.
Check your answers
- Do you have a written answer for every question you hope nobody asks?
- Does each answer start with the answer?
- Where you do not know, can you say how you will find out?
- Has someone challenged you out loud, not just on paper?
Not sure how your answers will hold up?
Send me your pitch deck along with a short summary. I’ll tell you which questions you are most likely to face and where your answers are weakest.