Preparing Your Startup for Investor Questions

Raising the capital you need won’t happen with only a pitch deck. You will also need to address the deeper, probing questions investors are bound to ask. Being aware of both your strengths and weaknesses will help you use even the toughest questions to your advantage.
Anna Mazarsky has advised more than 500 startups and helped them raise tens of millions of dollars over the years. Here are her tips on preparing for investor questions and building on them to convince investors to invest. 

1. Presenting yourself as a winning team

Don’t be shy about showcasing your team’s strengths. Highlighting the collective experience and individual achievements of team members can paint a vivid picture of capability and dedication. Let investors know how your individual capabilities complement each other and contribute to your chances of success. However, do not avoid spelling out what talents or skills your team is missing. On the contrary, let investors know that you are aware of what your team will need to do to succeed, and explain how you plan to address any gaps in your team’s capabilities in the future. Proactively planning to fill these gaps, whether through future hires, training, or partnerships and presenting these strategies to investors can mitigate concerns about potential weaknesses and underscore the team's strategic foresight.

2. Be an expert on your customer's journey

Be ready to clearly articulate the journey your customers undertake from initial discovery to loyal patronage. This narrative should include strategies for customer acquisition, engagement, conversion, and retention, providing a clear view of how the startup intends to capture and grow its market share.

3. Acknowledging the Competitive Landscape

Recognizing Competition and Defensibility: A realistic appraisal of the existing competition and alternatives to your product or service, and a clear delineation of your startup's unique value proposition are critical. Further, discussing how your technology or service is protected, through patents or other competitive advantages, can reassure investors of your startup's defensibility and long-term viability in the market.

4. Financial Clarity and Realism

Investors seek transparency and realism in your startup's financial projections and needs. Being upfront about the amount being raised, its specific uses, and how it extends your runway reflects prudent financial management. Avoiding over-optimism in financial projections and instead presenting well-reasoned, achievable financial goals builds credibility.

5. Showcasing Resilience Through Challenges

The startup journey is replete with challenges. Preparing to share stories of obstacles faced and overcome not only highlights the team's resilience but also their problem-solving capabilities and ability to work cohesively under pressure. These anecdotes can significantly enhance investor confidence in the team's capacity to navigate future challenges. 

Conclusion

Investor interactions offer a unique opportunity to transform the trajectory of a startup. By thoroughly preparing beyond the pitch deck, startups can effectively communicate their value and potential, laying the foundation for a successful partnership with investors.