How do you answer an investor question?
The best way to answer this question is to be completely transparent. Tell them exactly how much money you've raised, from which investors, and at what valuation. If you're not sure how to value your company, there are a few different methods you can use, but the most important thing is to be consistent.
- Remember, every investor is different.
- Listen to the question before you answer.
- All questions are good questions.
- Every investor question is an opportunity.
- How you answer is important.
- Think like a teacher.
- Prepare your investor Q&A properly.
- Avoid unanswerable questions.
- Serial investor Magnus Kjøller receives more than 500 cases annually, and in many cases has founders an unrealistic view of their own business when they apply for capital. ...
- “It can't go wrong”
- "We have no competitors"
- "I need a director's salary"
- "We need capital - not your help"
- How does your company fit into the industry?
- What are the major obstacles to your success?
- How did you calculate the size of your market and its growth rate?
- What makes your company different?
- What value do you provide that is not already available to your customers?
Don't ramble on in your answers. Keep your responses concise and to the point. This will help keep the investor's attention focused on what you're saying.
Explain Why You're A Good Fit For The Investor
Investors want to know that you've done your research and that you're emailing them because you believe their firm's interests and your's are aligned, not because you've emailed every VC in town to try and raise some money.
- Craft a Clear, Concise Pitch. When speaking with potential investors, you need to make every second count. ...
- Articulate Your Product's Value. ...
- Tell a Compelling Story. ...
- Explain What Funding Would Provide. ...
- Highlight the Specific Investor's Appeal.
- Keep some money in an emergency fund with instant access. ...
- Clear any debts you have, and never invest using a credit card. ...
- The earlier you get day-to-day money in order, the sooner you can think about investing.
Take informed decision. Whether you decide to invest, sell or hold - always make sure that you know why you are taking the decision. Conduct proper research to ensure that your decisions are reasonable. Your investment decisions must be data-driven and not sentiment- or reputation-driven.
The worst mistakes are failing to set up a long-term plan, allowing emotion and fear to influence your decisions, and not diversifying a portfolio. Other mistakes include falling in love with a stock for the wrong reasons and trying to time the market.
How do you impress an investor?
- Research your investors.
- Prepare your pitch.
- Practice your delivery.
- Prepare for potential questions.
- Follow up after the meeting.
If your company is early stage and has a valuation under $1M, don't ask for a $5M investment. The investor would be buying your company five times over, and he doesn't want it. If your valuation is around $1M, you can validly ask for $200K–$300K, and offer 20–30% of your company in exchange. Type of investor.
For investors, they're usually looking for a return on their investment (ROI). This means that they're expecting the startup to grow and be successful so that they can make money from their investment. Of course, there are different levels of ROI that investors may be looking for.
Listen carefully and answer them with confidence and clarity. Show them that you understand their concerns and have a plan for addressing them. Be sure to stay professional at all times and keep the conversation focused on how your business can provide value to potential customers and investors alike.
- They panic-sell. ...
- They go to cash and stay there. ...
- They are overconfident and make poor choices. ...
- They dig a deeper hole trying to make up for losses or bad choices. ...
- They forget to rebalance.
- Overconcentration in individual stocks or sectors.
- Owning stocks you don't want.
- Failing to generate "tax alpha"
- Confusing risk tolerance for risk capacity.
- Paying too much for what you get.
- Innovation to the rescue.
Investors want to know the size of the overall market and the total number of potential clients. The investor would hesitate to invest if the planned market size is insufficient since they might not receive sufficient profits. It must be remembered that the company should be sustained over the long term.
- 1 Understand their perspective. The first step is to try to understand where the investor is coming from. ...
- 2 Address their issues. ...
- 3 Show your value. ...
- 4 Build rapport. ...
- 5 Follow up. ...
- 6 Handle conflict. ...
- 7 Here's what else to consider.
Don't get defensive or try to “solve” the issue right away. Wait for the cue or ask the investor for permission to ask questions or respond. Don't say “The stock is turning around or it's going to go up soon.” Don't, under any circ*mstances, try to advise the investor on whether or not they should keep or sell a stock.
There are different ways companies repay investors, and the method that is used depends on the type of company and the type of investment. For example, a public company may repurchase shares or issue a dividend, while a private company may pay back investors through a management buyout or a sale of the company.
How do investors give you money?
Some pay income in the form of interest or dividends, while others offer the potential for capital appreciation. Still, others offer tax advantages in addition to current income or capital gains. All of these factors together comprise the total return of an investment.
- Understand Your Investment Goals and Time Horizon. ...
- Assess Your Risk Tolerance. ...
- Diversify Your Investment Portfolio. ...
- Avoid Trying to Time the Market. ...
- Educate Yourself and Seek Financial Advice. ...
- 2024 Tax Deadline: Mark Your Calendars for April 15.
“The first rule of investment is don't lose. The second rule of investment is don't forget the first rule.” Buffett famously said the above in a television interview.
Key Takeaways: The rent charged should be equal to or greater than the investor's mortgage payment to ensure that they at least break even on the property. Multiply the purchase price of the property plus any necessary repairs by 1% to determine a base level of monthly rent.
1 – Never lose money. Let's kick it off with some timeless advice from legendary investor Warren Buffett, who said “Rule No. 1 is never lose money.
