If you are planning to tie up with venture capitalists, you have to be ready as there are hundreds of questions they will throw at you before they can make that investment. But you must not fear, as for sure, before you open up a business, you have a very strong plan in hand to make it successful.
Sure, capitalists like Christopher Nohl would want to make their investments count, hence they will ask all questions that can help them decide whether investing in your business is the right thing to do or not.
Expect that there are so many questions that will cross your way, and to make you a little ready, here are a few questions to expect from capitalists.
What opportunities would they get by investing with your business? Sure, they want to know what’s in it for them if they invest. You have to be very clear in terms of discussing with them the opportunities of your business. How big are you eyeing the business can grow? What are you planning to do to make all these opportunities come true?
You cannot blame them if they become a bit demanding in this department, especially if they will invest huge amount of money.
- Return of investment and possible yield of investment in the future
When they ask about return of investment, they do not mean that you provide them with definite or exact dates but at least a rough estimate as to when they expect to get their investment back, and start earning income from it.
This is a question that you have to answer in the most honest manner possible. Do not give them false hopes as that will definitely pull your reputation down. Sure, investors understand that huge investment are not expected to be returned in the near future, hence there is no reason why won’t you be transparent, anyway, transparency is important for business partnership.
- Names and background of the founders
Sure, investors are interested to know the names behind the company where they are about to invest their hard-earned money into. Letting them know the names and the backgrounds of your business leaders is important especially if you want to impress them.
Whether the founders and leaders of the business you are building have an impressive background or none, you have to let the investors know.
They will surely ask the risk of investing in your business, and guess what, you need to tell it to them blow by blow. There is no perfect business, more so businesses that are starting up, hence the investors understand that there are risks, you just need to give them your plans for these risks to be avoided or risks to be solved.
- Compliance to the law
You need to give them the confidence that you are compliant and you are not going against what the law prescribes. Sure, no one wants connection with illegal businesses, hence let them know that you and your business are clean.