From The Trenches, Chapter One
As one of Ohio’s leading venture capital firms fueling the startup economy, we’re constantly working hand in hand with talented, innovative people at various stages of the entrepreneurial journey. Along the way, we’ve helped answer all sorts of questions, spanning from the earliest stages of startup ideas to late stage exit strategies during boardroom meetings. We’ll be sharing some of those questions and answers here in our new series – From the Trenches. Whether you’re an aspiring entrepreneur, a startup CEO, or anywhere in between, we hope you’ll find these Q&As useful.
Q: What are some questions I should be prepared to answer about my business when I seek funding?
A: First, start with your problem/solution/value proposition. To build this out, ask the questions: What problem are you trying to solve? Why is your solution the right approach? What makes you different from the competition? What is your value proposition?
Talk about how much you are raising and what the funds will be used for. It’s also a good idea to have some thought around how much runway this funding will provide for the company and when you intend to raise your next round of funding.
You’ll also want to speak to the competitive landscape. Investors will have varying degrees of familiarity with your industry and it’s important to showcase your knowledge of the space and how/why you’ll be able to outperform the existing competition.
Further, you need to lay out your pipeline. Be able to talk at a high level about your pipeline and traction since the last funding round. Think about your key customers and be able to highlight them — stories that showcase the value prop of the business as well as customers that prove out certain business strategies for your company, such as an entrance into a new industry segment.
Finally, you will face questions about revenue growth and projections for future business. What does revenue generation look like currently? How big is your pipeline? Where do you expect to be in the next three to five years?
You should be prepared for additional questions based on the individual situation, but these are the staples you’ll almost assuredly face every time.
–Jill Raderstorf, Partner at the Ohio Innovation Fund