Whether you’ve ever watched an episode of “Shark Tank” on TV or not, you may have heard that the investors on that show always ask some tough questions to those pitching their companies. In many ways, it’s not that different from what happens in real life since intelligent investors never want to release any funds until they’ve determined that entrepreneurs are fully prepared for the world’s highly competitive marketplace.
Of course, before pitching your company to anyone, you must first fully research the competition, along with any other business that has tried to market a product or service that’s similar to yours. You must then try to understand why that company failed and be ready to explain how your approach (or product or service) is different and why it’s far more promising.
You should also present yourself in as professional manner as possible, and be ready to explain your company’s strengths and weaknesses to potential investors – while also noting why you’re the best person to be running the company. Well-founded enthusiasm can be contagious.
Here’s some additional information you must be ready to provide if you’re hoping to walk away with enough money to fully fund your company.
Types of Questions Often Asked of Those Seeking Company Investors
What makes your current product/service so unique? As noted above, you must do your homework ahead of time and fully review all that your company currently offers with all of your technical, design, and marketing people before requesting funds;
Why are you the right person to be starting this company or helping to run it? Be prepared to present your background in an abbreviated form, highlighting all of the past projects or businesses you’ve been involved with which prepared you for your current position/challenges;
Who is already on board with you in terms of investors? If you don’t already have some, even if they are just family members or one or two friends, you may want to wait and pitch your company when you can show that others have put their money behind their high praise of your company. Also, be ready to provide the contact information for these first investors because you’ll definitely be asked for it. If you are currently without any investors, you can still pitch why you need help – but be sure to have at least some well-known mentors who can be contacted -- and are enthusiastically willing to vouch for you, as to why your company is unique and shows great promise;
What past successes and failures – and try to name both – have prepared you for this current venture? Everyone has made mistakes. Be ready to share the right information, carefully accenting what you learned from past errors. Next, present evidence of how you’re approaching the launching of this new company differently so you can avoid the types of problems you may have experienced in the past. Of course, keep the accent on all that you’ve handled successfully in the past;
- Can you name other companies that have tried to market similar products/services? What happened to them – are they still out there as your competitors?Also, have you obtained patents on your product designs? Instead of these two questions, you may simply be asked what you know about one or two specific companies. Hopefully, you will know all about them. If you don’t, be sure to note that you’ll be fully researching them after your current meeting so you’ll be better prepared to run your own company.
If these types of questions make you anxious or if you’re starting to realize you need to do some more homework before asking for any funds, take the time to review the 28 issues raised in this article which addresses similar issues in even greater detail.
To obtain help with handling all of your Georgia business planning needs, please contact the Law Offices of Shane Smith today. You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999