During your presentation to an investor, the investor will ask you a number of questions. Be prepared to answer these questions at any stage of the fundraising process:
Take notes on what the investor is focusing on and saying. Reply in a timely manner (less than one week) to the investor’s follow-up requests or questions that you could not answer at that time.
Investors will want to see information that indicates the current financial status of the business. Usually, they will expect to see current reports such as a profit and loss statement, a balance sheet and a cash flow statement as well as projections for the next two or three years.
The 4% rule limits annual withdrawals from your retirement accounts to 4% of the total balance in your first year of retirement. That means if you retire with $1 million saved, you'd take out $40,000. According to the rule, this amount is safe enough that you won't risk running out of money during a 30-year retirement.
The Dragons will want to know if there is enough demand for your product or service to make it profitable. Who is your competition?What makes your product better?Does your idea or product have the capacity for growth?
The investors hosting Shark Tank typically require a stake in the business—or a percentage of ownership—and a share of the profits. A revenue valuation, which considers the prior year's sales and revenue and any sales in the pipeline, is often determined.
So they're going to want to know exactly why you need the cash and exactly what you plan to do with it. They'll also want to know when they can expect a return; that should be a part of your business plan. Investors will also be looking for an exit strategy, and you need to think about that in advance.
As with an interview for any job, make sure you do plenty of research about the company before you go. See what they have done well in the last few years, along with focusing on the parts that they could improve on. Make sure you're aware of what their portfolio consists of and what kind of investments they focus on.
VCs will want to know what milestones — particularly those related to growth and revenue — you will hit and when. If your startup has no immediate plan for revenue, say, because product development will take time, you should be ready to list other benchmarks you will achieve in lieu of revenue.
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Introduction: My name is Cheryll Lueilwitz, I am a sparkling, clean, super, lucky, joyous, outstanding, lucky person who loves writing and wants to share my knowledge and understanding with you.
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