When you pitch a startup to angel investors, you want to get questions. If you don’t get questions then your pitch fell flat and nobody is interested. So plan on answering questions—and hope you have some to answer! ( Author: Tim Berry is the founder and chairman of Palo Alto Software)
Ideally, your main pitch should answer these core questions:
This first list of questions are questions you should answer with your main pitch. If they ask you any of these, then you might be moving too slowly, you might have had an awkward flow, or you might just embrace the spontaneous interest and change the flow accordingly. You should always plan to answer all of these questions with your pitch deck.
- What problem (or want) are you solving?
- What kinds of people, groups, or organizations have that problem? How many are there, where are they, what do they do about it now?
- How are you different?
- Who will you compete with? How are they different?
- How will you make money?
- How will you make money for your investors?
- How fast can you grow your business? Can you scale up volume without proportional scaling up headcount?
- What’s proprietary? What are you going to do to defend that?
- What traction have you made?
- What milestones have you met?
- How are you going to get the word out?
- How are you going to close sales?
- How are you going to get started?
- How are you going to spend investors’ money?
- What makes your team suited for this business?
And please don’t think this list is exhaustive or comprehensive. You have to know your business; you should know what else is appropriate.
Some good follow-up questions:
Some other questions are indications of interest that follow from what you’re presenting. These are questions like:
- How did you come up with this idea?
- Why did you decide to (some marketing, product, or financial decision in the pitch)?
- What about (some objection related to market, competition, financial plans)?
- Who are your investors so far?
- How strong is your patent?
- Could you grow faster with more money?
- Do you realize you’re vastly underestimating your marketing expenses (or sales expense, or margins through channels, or headcount required for direct selling)?
- Do you know comparable numbers for similar businesses?
- Why don’t you do this yourself? (Meaning, why do you think you need investors?)
- What sales have you made so far?
- Have you actually talked to those companies?
- Who else is interested?
- Who else have you shown this to?
- How did you come up with that valuation?
Some questions you don’t want:
You’ll know the bad questions when you get them. They are hard to anticipate. But you’ll know. Here is just one example to give you the idea (and to round out my numbers):
- Why would anybody want this?
Have you ever pitched an angel investor? What questions did you get asked? Anything that came as a surprise, or that you’d warn others they need to be able to answer?