What Questions Will Investors Ask?

During a capital raise process, your going to get asked a ton of questions about your business.  As the CEO, you should be able to answer most questions.  Below a list of high-level questions to help you prepare.

Company History

  • When and why did you found the company?
  • Walk us through the development of the Company from founding to today.

Product

  • Discuss the current product/service offering
  • What is your pricing structure?
  • What are your standard contract terms?
  • How does your pricing compare to competitors?

Customers

  • Who are your target customers?
  • How many customers do you have?
  • How do your customers make decisions?
  • How do you communicate your value to your customers?
  • What percentage of your revenue are your largest and top 5 accounts?
  • How much opportunity is there to increase revenue from existing customers?
  • What’s your average customer tenure?
  • What is your historical attrition rate? What about from a revenue attrition standpoint?
  • Discuss concentrations in the base (geographic, industry, type of customer, etc.)

Sales

  • Discuss the composition of your sales organization.
  • Walk through your typical sales process.
  • Where do leads come from?
  • How long is the sales cycle?
  • Who’s the decision maker at the customer?
  • What is your sales conversation rate?
  • What is your customer acquisition cost?
  • How large is your current pipeline?
  • What percentage of your projected revenue is already booked?
  • How do you compensate the sales team?

Growth

  • Where do you see the business in five years? What about ten years?
  • Walk us through the growth strategy.
  • Walk us through the product/service development roadmap.

Market

  • What do you view as the total addressable market size?
  • What is driving the adoption of this type of solution in the market?
  • What will drive demand for this product/service over the next 5-10 years?
  • Who are you bumping into in competitive situations?
  • How are you differentiated from competitors?
  • What % of the market do you currently have?

Employees

  • Where do you spend most of your time?
  • Who are the key team members?
  • Are there any gaps in the executive team?

Financial

  • What has driven revenue growth over the past few years?
  • What does your SG&A consist of?
  • Walk us through the headcount by department.
  • What is your gross margin %.
  • What’s your cash conversion cycle look like?

Transaction

  • What does your ideal transaction look like?
  • What are management’s plans going forward? Do you want to stay on, transition, out, etc?
  • How much capital would you like to take off the table?
  • How much capital do you need to achieve the growth outlined in the projections?
  • How much capital has been raised to date?  Who are the outside investors?
  • What valuation are you expecting?
  • What are the use of proceeds?

Other

  • Do you have any outstanding or pending litigation?
  • What is the corporate organizational structure? (LLC, C-Corp, etc.)
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