A Twoeyes Insight to the Questions Asked by Professional Investors

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?
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