Questions Tech Investors Wants Entrepreneurs To Answer:
Here are what investors at YCombinator ask people pitching their startups. Try to answer in 2 to 3 sentences.
What are you working on?
How does it work?
Someone else just showed us this idea, do you have anything else?
How far along are you?
Who are your users and why are they using this?
What do people do to solve this today and why are you better?
How are you going to get demand?
What are your backgrounds?
How did your team meet?
How big could this business be?
How much could you make in 1 year?
What is your biggest objection from users?
How did you start working on this idea?
Do you have any domain expertise?
Why are you the right team?
What are the economics of the business?
When do you become ramen profitable?
How will you achieve a monopoly?
If I gave you 120k right now, what would you spend it on?
What is the equity split? If uneven, tell me why.
Where will you be by the end of YC?
If you fail, what will the reason be?
What is your burn rate?
Why aren't you growing faster?
Who are you most afraid of?
What is your CAC (Customer acquisition cost - How much does it cost to get one customer?) and LTV (Lifetime Customer Value - How much business does an average customer do with you over a larger period of time?)?
What is your biggest weakness as a team?
Why aren't you hiring to fill that weakness now?
6 months from now, what will be your biggest problem?
What has the feedback been from users so far?
If you find contact details of an investor and you want to send a cold email, just send an executive summary at first - giving 2-3 reasons why they should consider your case. What is that noteworthy thing about you? Sales? High use? Unique technology that will change the industry? Better and cheaper replacement for industry leader? Just get them to pay interest. Don't mess it up by sending a big business plan.
How to pitch to investors succinctly
In this age of where 'everyone is a startup founder', just make a 10 slide (max) pitch.
Use Guy Kawasaki's 10-20-30 rule: 10 slides in under 20 minutes, with 30 point fonts.
What to put in a 10-12 pitch slide deck (fancy name for a presentation/proposal):
1. Front page: Name, contact/s
2. Elevator Pitch: Your vision/product + mission as a 1 liner
3. Momentum, Traction, Expertise: Your key numbers - Growth metrics, press mentions, customer success stories (E.g. How one customer used your product to...)
4. Market Opportunity: Market, market size, customer base, trends and numbers
5. Problem & Current Solutions: What problem/need do you solve/ fill?, Who else is/are doing it
6. Product or Service: Your solution, Give the biggest 1/2 use cases (E.g. 'Jane urgently needs a ...but...so she...what happens next' - use graphic/s
7. Business Model: Key Revenue Streams, primary customers, pricing model (how do you set the price, margins), revenue and # of customers to date, conversion rates in the industry, LTV (Life Time Value) of an average customer - how many months etc?
8. Market Approach & Strategy: Where are your customers at the moment, How to target them, ways to achieve growth rate, most important channels, unique marketing approach (if any)
9. Team & Key Stakeholders (Investors, Advisers): key team members (and their prior jobs, successes, relevant domain expertise), the most important member
10. Financials: 3-5 years of financial projections, important assumptions in your model of expenses, customer conversion, market penetration %.
Highlight each of these annual data for at least 3 years (Total customers, total revenue, total expense, EBITDA - Earnings before interest, taxes, depreciation and amortization)
11. Competition: The top gorillas, your advantages, how you are unique suited as a player in the market, why have your competitors succeeded (reasons for each) and are you different
12. Investment (Your ‘Ask’ for funding, Basic use of funds): How much, On what terms (Equity, Debt, Convertible Note), timing of your Capital raise (e.g. just launched our MVP - Minimum viable product to great success), existing & notable investors (if any), use of money as % of total raise (Founder salaries, sales & marketing, new hires, technology / Product or Service development, capital expenses / equipment.
Try to derail your pitch with a demo. The goal of a pitch is attract enough interest to get to due diligence. Using all your slides and telling your entire story is not necessary. A picture may be worth a thousand words, but a demo is worth a thousand slides. Ideally, as an F18 pilot, you explain what you do, what problem you solve or opportunity you provide, and you launch into a demo that sucks the eyeballs out of people—and never use the rest of your slides.
- Guy Kawasaki
Thank you for reading.
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