How to Prepare for an Investor Pitch

6 Questions Every Entrepreneur Can Expect to be Asked

As a fund manager, investor and entrepreneur, I’ve listened and been a part of dozens of pitches. While they all have a uniqueness to them and an element of excitement, not all go off without a hitch. What goes wrong can vary. Sometimes it’s the business concept, sometimes it’s the plan, but in some cases it’s the entrepreneur’s pitch. Can the last be avoided? In many instances, yes. While there are a lot of great tips available on how to prep for a pitch, and there’s also plenty of advice on how to successfully execute a meeting, I think there’s something Investors haven’t shared. There’s more to a good pitch than being concise, knowing your market and not reading a PowerPoint deck. I want to let Entrepreneurs in on a little secret: there are a few questions that you can expect to be asked…every time. Expect these and prepare appropriately, and your chances at nailing the pitch have skyrocketed: 1. What’s your complete competitive landscape look like—beyond just where you’re playing? An entrepreneur needs to demonstrate that they understand (and respect) the competitive environment they are operating in. What sets them apart from the competition? I want to see that companies understand their growth and contraction trends on their competition, especially as it relates to their product or service.  As part of understanding the competitive landscape, it’s also very important to understand what areas entrepreneurs choose not to compete in and why they opted not to pursue those areas—knowing where not to compete (because it is outside the current capabilities of the organization) demonstrates a high level of self-awareness. 2. What’s your competitive advantage? An entrepreneur must be prepared to talk about how his/her solution better, faster or cheaper than existing solutions and how much better, faster or cheaper it is. He or she should be able to quantify the customer value proposition, validate that the solution is better or provide data to indicate that such items are meaningful to the customer. 3. What are your achievements and milestones? Are goals being met or is the company tracking well to meet them. Have there been setbacks that forced a change in plans? If so, what was learned from those situations? I am also very interested in upcoming milestones and challenges. How will an investment help reach those milestones? What are the biggest challenges, weakness and roadblocks and how are they being addressed and overcome (e.g. key hires, change of revenue model or sales strategy, etc.). 4. What are the risks? It’s always better that an entrepreneur share their risks with potential investors—it builds trust and again shows self-awareness as well as a pragmatic view of the overall forces that may impact the company. 5. What’s the exit strategy? Every investor wants to talk about exit strategies, and they want to know that his/her investment companies have a sophisticated understanding of the exit strategies that would likely be available to the business. Why? As an investor, I want to invest in companies that will have a positive return in a short to moderate timeframe (say 3 to 7 years). Startups need capital, I need a positive return on my investment. I want to know that the company is thinking about this balance of needs and is actively developing the product, partnerships, network, and understanding of the motivations behind M&As in their industry, which will facilitate that exit opportunity in the future. 6. Why me? I want to know how an investment from me can add value to an organization and help meet milestones. In my opinion, a smart entrepreneur has done his homework on potential investors and has strategically targeted me for a specific reason.

– Shereen Shermak, CEO