A Twoeyes Insight to the Questions Asked by Professional Investors
Top VC Questions
- Who is your real customer? [Who really “Cares”?]
- Why can’t they live without it?
- How will the venture reach all the identified customer segments?
- How will the much does it cost (in time and resources) to acquire a customer?
- How long before the customer sends the business a check?
- How many Widgets do you need to sell to break even?
- What are the key customer tangible and intangible factors that anyone has to provide in
- order to succeed? [What is the “whole product”?]
- What are your customer’s values?
- How are pricing decisions made?
- What are the barriers to entry?
- What are the strengths and weaknesses of your competitors?
- What has the key management team accomplished in the past?
- Who else needs to be on the team?
Company:
- What do you better than any other company?
What else do you have besides technology?
- Is this a product or a business?
What are your unfair advantages?
- What is your organization’s uniqueness?
- What do you consider to be your Company’s greatest weakness?
- What are your unfair or sustainable competitive advantages?
- What do you have that will enable you to shift gears if the market is a lot different than
- you plan on?
Customers:
Who is your real customer?
- What industry groups are they drawn from and what are the overall trends?
- How are they doing it today?
- Why/how will they use your product?
Why can’t they live without it?
- What does the market want?
- What pain is so high that they are willing to come to you?
- How intense is the pain?
- What motivates your customer to buy?
- What are your customer’s values?
- Who are your early adopters and why?
- Who is your mainstream market?
Sales & Channels:
- How will customers buy your product?
- How will customers become aware of your product?
- Who will they call for technical support?
How long does the purchase decision process take?
- What are the key variables in the buying decision? (price, service, features, reputation,
- credit terms, delivery speed, or relationship with Salesman)?
- Are buying decisions affected by advertising or sales promotion?
- What is the degree of brand loyalty among customers? How is it measured or determined?
- What methods are used to lock customers in?
- What would be required to persuade the user of a competitive product to switch and how
- much would this cost?
- How important is personal selling to this customer?
- How good does the salesperson have to be?
The Whole Product:
- What other products/accessories will customers buy to completely fulfill their needs?
- What are your customer’s intangible needs?
- What is the “whole product”?
- How is the product priced?
- What are the expected future price trends?
- How are pricing decisions made?
- Is quality the key to the sale of the product?
Competition:
- Who are the major competitors at present?
- Are there any expected new entries or other potential competitors?
- What is the financial strength of the present competition?
- What is the relative ease of entry into the field?
- What is the importance of intangibles such as lead time, goodwill, patents?
- What are the barriers to entry?
- List all of the major industries in which this product is sold:
- How does the company compare with competition in each of the following categories?
- product features
- market share
- marketing capability
- production capability
- financial resources
- financial management
- R&D capability
- Overall management strength
People:
- Where are the founders from?
- Where have they been educated?
- Where have they worked – and for whom?
What have they accomplished – professionally and personally – in the past?
- What is their reputation within the business community?
- What experience do they have that is directly relevant to the opportunity they are
- pursuing?
- What skills, abilities, and knowledge do they have?
- How realistic are they about the venture’s chances for success and the tribulations it will face?
Who else needs to be on the team?
- Are they prepared to recruit high-quality people?
- How will they respond to adversity?
- Do they have the mettle to make the inevitable hard choices that have to be made?
- How committed are they to this venture?
- What are their motivations?
Opportunity:
- Who is the venture’s customer?
- How does the customer make decisions about buying this product or service?
- To what degree is the product or service a compelling purchase for the customer?
- How will the product or service be priced?
- How will the venture reach all the identified customer segments?
- How will the much does it cost (in time and resources) to acquire a customer?
- How much does it cost to produce and deliver the product or service?
- How much does it cost to support a customer?
- How easy is it to retain a customer?
Cash Flow:
- When does the business have to buy resources, such as supplies, raw materials, and
- people?
- When does the business have to pay for them?
- How long does it take to acquire a customer?
- How long before the customer sends the business a check?
- How much capital equipment is required to support a dollar of sales?
Competition:
- Who are the new venture’s current competitors?
- What resources do they control?
- What are their strengths and weaknesses?
- How will they respond to the new venture’s decision to enter the business?
- How can the new venture respond to its competitors’ responses?
- Who else might be able to observe and exploit the same opportunity?
- Are there ways to co-opt potential or actual competitors by forming alliances?