When raising money, try and make sure you have an impressive pitch deck to present, because it’s the ‘impressive’ bit that will get you your next investor meeting [info about pitch decks at the bottom of the page]. If you manage to get to a face-to-face meeting, make sure you have all the financials nailed, and take printed copies of your sales forecast, your income statement (aka ‘profit and loss’ statement), your statement of financial position (aka ‘balance sheet’), and your cash flow forecast for at least one year, ideally for three years.
Make sure you can answer the questions below, in detail, and have the relevant information to hand [i.e. company registration number, VAT number, any registration numbers relating to intellectual property, etc]. Being able to answer these questions confidently will definitely make a good impression on investors. Finally, like practicing a musical instrument, practice answering the questions below until you can answer them easily, accurately, and without too much thought.
INVESTOR QUESTIONS
Q1: What is the Trading Name of the business?
If there are multiple trading names, give all.
Q2: What is the Legal Name of the business?
Q3: Give a Brief Description about the business.
Q4: What is the Value Proposition of the business?
Explain why consumers will choose your product / service and explain how it stands out from your competitors?
Q5: What is the Valuation of the Business?
What is your valuation of the business in £’s or USD $? Explain how you’ve arrived at this figure.
Q6: What is your Investment Proposal?
What percentage of the business are you offering? How much are you wanting for that percentage in in £’s or USD $?
Q7: What will the Investment Be Used For in the business?
Explain what the investment will be used for.
Q8: What Impact will the investment have on the business?
Explain how the investment will change / improve your business.
Q9: What is the Current Employee Headcount?
How many full-time and part-time employees has the business? Please also give the full-time equivalent (FTE) number.
Q10: Tell us about the Current Shareholders?
Who are the current shareholders? How many shares do they own? At what price did they buy-in to the business? Have any shareholders received discounted shares? Have any shareholders received shares on a free gratis basis?
Q11: Tell us about the Founders?
Explain who are they? Are they still involved in the business? What percentage of the business do they own? What is their business / employment history? Highlight their expertise. Are they open to the opinions of investors?
Q12: Tell us about the Executive Directors?
Explain who are they? What is their title? What percentage of the business do they own? What is their business / employment history? Highlight their expertise. Are they open to the opinions of investors?
Q13: Tell us about the Non-executive Directors? [If any]
Explain who are they? What percentage of the company do they own? What is their business / employment history? Highlight their expertise. Are they open to the opinions of investors?
Q14: Apart from the directors, who are the Key Personnel?
Explain who are they? What are their roles? What percentage of the company do they own? What is their business / employment history? Highlight their expertise.
Q15: If a company, what is the Company Registration Number?
Q16: Is the business VAT Registered?
What is the business VAT number? Is the business up to date with its VAT payments?
Q17: What is the Current Financial Position of the business?
You will need to have the most recent ‘statement of financial position’ / ‘balance sheet’ available. We will be looking for the value of the ‘total assets’ (i.e. liabilities + equity). Break down the value by (a) tangible fixed assets, (b) intangible fixed assets, (c) sellable stock, (d) debtors, (e) cash at bank / in hand, (f) others?
Q18: Is the business able to meet its Obligations for the next 6 months?
Q19: What is the Current Creditors Value of the business?
You will need to supply the value of (a) amounts falling due within one year? i.e. borrowings and overdrafts, trade creditors, corporation tax, social security and other taxes, other creditors, etc; and (b) amounts falling due in over one year? i.e. any director’s loans, advances, credits, and guarantees as well as others.
Q20: What is the Current Shareholder Funds / Net Assets of the business?
Q21: Is the business currently up to date with HMRC Payments?
Is the business up to date with corporation tax, PAYE payments, pension contribution payments, etc.
Q22: What are the Current Borrowing Facilities of the business?
(a) Who are the current borrowing / credit facilities with? i.e. bank, individual, etc. (b) What is the type of borrowing? i.e. line of credit, revolving credit facility, overdraft facility, borrowing base facility, fixed length loan, etc. (c) What are the values of all the borrowing facilities? i.e. loans, overdraft, etc. (d) Are you up to date with payments on borrowing? (e) What is the purpose of borrowing facilities? i.e. working capital, cash flow management, flexibility, funding activities.
Q23: What will the Future Borrowing Facilities of the business look like over the next 3 years?
Who will the borrowing facilities be with? What type of facility will the borrowing be? (c) What value of borrowing will be required? What will the borrowing be for? Any other ‘future borrowing’ issues to discuss?
Q24: What is the Current Burn Rate / Cash Runaway of the business?
What is the speed at which the business is spending its cash reserves on a monthly basis? How much time has the business got before it runs out of money? Any other ‘burn rate’ issues we should know about?
Q25: Are any Loans Owed To Individuals (employed or not) by the business?
If so, Who is owed? How much is owed in £’s? What is the term of the loan? When did the loan begin? Are the loan repayments up to date? Any other information regarding ‘loans by individuals’ that we should know about?
Q26: Are any Loans Owed To Companies have loans owed to them?
If so, Who is owed?, (b) How much is still owed in £’s? What is the term of the loan? When did the loan begin? Are the loan repayments up to date? Any other information regarding ‘loans by companies’ that we should know about?
Q27: Do have a Cash Flow Projection for at least 1 year, ideally 3 years?
Q28: Do you have Management Accounts?
Q29: What kind of Legal Entity is the business?
Is it a Sole Trader? Partnership? Private Limited Company (Ltd)? Public Limited Company (PLC)? Joint Venture? Other?
Q30: What Share Classes does the business have?
Does the business have ordinary / common shares? Preference Shares? Alphabet Shares (Class A, Class B, Class C)? Mutual Fund Share Class? Other?
Q31: What is the Voting Rights of each share class?
Which classes have (a) full voting rights? (b) limited voting rights? (c) no voting rights?
Q32: What is the Dividend Rights of each share class?
Do any share classes have different entitlements to dividends? i.e. are certain shareholders rewarded with higher payouts or is there any prioritizing of dividend distributions for specific groups? If they have, please specify which do.
Q33: What is the Capital Rights of each share class?
Do any share classes have different entitlements to capital rights? i.e. on liquidation, do different share classes have different rights to a return of capital?
Q34: Are there any Share Classes That Receive Fees and/or Expenses?
Do any shares constitute a mutual fund where different share classes have varying expense ratios, sales charges, and investment minimums.
Q35: Is there a Share Class That ‘Does Not’ Allow a Share Buyback?
Q36: Is there a Share Class That ‘Can Not’ Be Diluted?
Q37: Predict the Dilution of Shares Over The Next 10 Years?
Q38: Is there a Tax and Employee Share Scheme / Share Incentive Plan (SIP)?
If so, please explain how it is working and what the take up and deal is.
Q39: How will you Build The Team and attract talent?
Q40: Does the business have any Patents Pending or Patents Granted?
If so, please give the: (a) date of application, (b) patent application or patent number, (c) Patent Cooperation Treaty (PCT) status / List of countries applied or granted for.
Q41: Does the business have Trademarks Applied For or Trademarks Granted?
If so, please give the: (a) date of application, (b) application number, (c) list of countries applied for or granted for, (d) Which IPO classification number/s of goods and services are applied for.
Q42: Does the business have Copyrights?
If so, please give a list.
Q43: Does the business have Trade Secrets?
Q44: If a technology based business, where are you on the scale of #1-9 on the Technology Readiness Level (TRL) measurement system?
i.e. #1 Generating product ideas and validating them through market research and customer feedback – #2 Technology concept formulated – #3 Experimental proof of concept – #4 Technology validated in lab / worshop – #5 Technology validated in relevant environment – #6 Technology demonstrated in relevant environment – #7 System prototype demonstration in operational environment – #8 System complete and qualified – #9 System proven in operational environment.
Q45: If a product based business, where do you think you are in the Stages of Product Development?
i.e. #1 basic principles observed – #2 technology concept formulated – #3 experimental proof of concept – #4 technology validated in lab / workshop – #5 technology validated in relevant environment – #6 technology demonstrated in relevant environment – #7 system prototype demonstration in operational environment – #8 system complete and qualified – #9 system proven in operational environment.
Q46: Define the problem your Product / Service is Attempting to Address?
What problem is your product / service solving for the customer. If possible, support with real-world examples and/or data.
Q47: How does your Product / Service Solve The Problem?
If possible, highlight its unique benefits and features.
Q48: What Market Research Has Been Done to see if the public think your product / service will solve the problem?
Please share feedback and data.
Q49: Will Customers Pay For A Solution to solve the problem?
Why do you think the problem you’ve defined is a real-life problem for the customer; and do you think that these customers really need or desire a paid-for solution. If possible, support with real-world examples and/or data.
Q:50 How Will The Business Deal With The Targeting and Segmentation of the market?
How will you choose the correct channels for your product / service? How will you monitor, analyze, and improve the performance of channels and sub-channels moving forward?
Q51: What is your (RTM) Route to Market Now and Beyond?
Give a timeline of how you will be selling and by which channels, e.g. (a) online, (b) subscription, (c) your own brick-and-mortar-stores, (d) other retail companies brick-and-mortar-stores (e) wholesalers / distributors in individual countries, (f) master wholesalers / distributors in blocks of countries, (g) trade shows or exhibitions, (h) your own pop-up shops, (i) employed area sales people, (j) freelance / self-employed sales people, (k) mail-order catalogues, (L) licensing agreements (M) other/s.
Q52: How is the business going to Deal With Third-party Companies?
i.e. how will the business choose the correct 3rd party’s for retailing, distribution, acquisition, licensing, partnerships, joint ventures, etc?
Q53: What is the Potential Market Size for your Product / Service?
Please supply your best estimate of the addressable market size for your product / service. If possible, show with data.
Q54: Who is your Target Customer / Target Audience?
Brief description of who you think may be interested in your product / service. Please identify the specific customer segments most likely to purchase your product / service and include if you are / think you’ll be supplying: consumers, education, industry [which industry sectors], military, health services, etc.
Q55: What is the Demographics of your Target Customer / Audience?
e.g. age, gender, income, education, family status, etc.
Q56: Where is the Geographic Location of your Target Customer / Audience?
e.g. Where do your potential customers live? Are they local, regional, international?
Q57: What are the Psychographics of your Target Customer / Audience?
e.g. their values, lifestyle, interests, attitudes, etc.
Q:58 What are the Behavioral Patterns of your Target Customer / Audience?
e.g. how do they shop? what are their buying habits?, what are their expectations? etc.
Q59: What Trends are you Seeing and Expecting in the Market your product / service will operate in?
Explain how micro and macro events are effecting your market. Is there a demand in your sector for: sustainability and eco-friendly products? Data-driven personalization? Augmented reality shopping? Omni-channel experiences? Artificial Intelligence? Machine Learning?
Q60: What is the Market Size Potential of the sector your product / service operates in?
If possible, show a high-level overview of financial projections through data with revenue / forecasts, cash-flow forecasts, and potential income statements, through charts and graphs.
Q61: What Traction Has Already Been Achieved?
i.e. have you got initial (a) sales / users, (b) partnerships, licensees, resellers, etc. (c) milestones, etc.
Q62: How will you Measure Progress and Success?
How will you use SMART goals? (Specific, Measurable, Achievable, Relevant, Time-bound). How will you track key metrics and milestones? How will you review your performance? How will you record self-reflection? How will you record feedback? How will you adjust your approach as needed to stay aligned with your objectives?
Q63: How are you Currently Generating Revenue / Income?
Outline where and how your current sales are being achieved.
Q64: What was the business Revenue / Income for the Past 3 Years?
If possible, show in quarters excluding VAT. e.g. Year 1 Q1 = £x, Year 1 Q2 = £x, etc.
Q65: What was the business Gross Profit for the Past 3 Years?
If possible, show in quarters excluding VAT. e.g. Year 1 Q1 = £x, Year 1 Q2 = £x, etc.
Q66: What was the business Expenditure for the Past 3 Years?
If possible, show in quarters excluding VAT. e.g. Year 1 Q1 = £x, Year 1 Q2 = £x, etc.
Q67: What was the businesses Net Profit / Loss for the Past 3 Years?
If possible, show in quarters excluding VAT. e.g. Year 1 Q1 = £x, Year 1 Q2 = £x, etc.
Q68: Going forward, How Will The Business Generate Revenue / Income in the Future?
Please include your sales and marketing strategy.
Q69: What are the Business Sales Targets / Goals?
If possible, show in quarters for the next 3 years (excluding VAT). e.g. Year 1 Q1 = £x, Year 1 Q2 = £x, etc.
Q:70 How Quickly can the Business be Scaled?
Describe how quickly you scale revenues and operations? What will the impact be on costs? How will you handle increased demand efficiently? What systems and processes will you put in place to enable the scaling?
Q71: What is the Sales Strategy to Acquire New Customers?
Map the steps involved in acquisition of new customers, from initial contact to the closure of the deal; and describe what method/s and technique/s will be used to engage and convert prospects, such as: personalized selling, leveraging technology, building relationships, others.
Q72: What Competitive Analysis has been done?
Who are your competitors (direct and/or indirect)? What do you understand about your competitors (strengths and weaknesses)? Have you identified the opportunities, differentiates, and key advantages that your product / service will offer customers, over your competitors?
Q73: What ‘Key Performance Indicators’ (KPI’s) have been set for the business?
Describe the KPI’s and quantifiable metrics that are in place to evaluate, track progress, and measure the effectiveness of the businesses achievement against its sales strategy objectives.
Q74: What are the main Barriers to Entry for a new competitor in your sector?
Examples: High start-up costs? Strong brand loyalty among existing businesses? Limited access to distribution channels? Regulations? Financing? etc.
Q75: How will you Maintain a Competitive Edge over your competitors?
Describe how you will focus on creating and leveraging a unique advantage over your competitors. Will it be through: Price? Specialism? New markets? Efficiency? Disruptor products / services? etc.
Q76: What Costs will be required To Support Sales Growth process?
Identify the ‘tools and technology’ required to achieve the sales strategy objectives.
Q77: What are the Biggest Risk Factors anticipated for the business and how will they be mitigated??
Examples: Loss of key people? Financial issues? Market issues? Operational issues? Strategic issues? Competitors? Compliance risks? Running out of cash? Supply chain problems? Poor management? Changing regulation? Wider economic downturn? Natural disasters? Cybersecurity threats? Damage of reputation? etc.
Q78: What Legal Hurdles are anticipated for the business and how will they be mitigated?
Examples: Company law? Employment law? Consumer rights? Intellectual Property? Data protection? Tax compliance? Contract law? etc.
Q79: What Regulatory Hurdles are anticipated for the business and how will they be mitigated?
Examples: Compliance? New technology? Antitrust issues? Cybersecurity? Data protection (GDPR / CCPA)? Financial crime (AML / KYC)? Environmental sustainability (ESG)? etc.
Q80: What Technical Hurdles are anticipated for the business and how will they be mitigated?
Examples: Inter-connectedness of systems? Combat of advanced threats? AI? Machine Learning? AI-enabled attacks? Multi-cloud environments? Hybrid environments? Storage safety? Legacy system modernization? Quantum computing? Spatial computing? etc.
Q81: Why Are You Approaching Us for investment?
Q82: What do you Want from an Investor?
Q83: Are you Using an Intermediary / Agent to make an approach to investors.
Q84: What is the Exit Strategy for your business?
Will you look to: sell the business? management buyout (MBO)? family succession? initial public offering (IPO)? merger? acquisition? other?
WHAT IS A ‘PITCH DECK’?
A pitch deck is basically a short form presentation of your business plan. It should be presented as a professionally designed set of slides that helps future investors learn and understand a basic overview of your business. It needs to be concise, so personally I would keep the pitch deck size to between 14 and 18 slides. An example of what to cover in a pitch deck:
– Slide #1: Welcome
Make sure your company logo is there with a strap line. (e.g. if you were McDonald’s, you could have the Golden Arches ‘M’ logo and the strap line “I’m Lovin’ It”.
– Slide #2: Introduction
Who you are, your title, about the business, why you are there.
– Slide #3: Problem Overview
Choose a problem or two that your target customer / audience faces.
– Slide:#4: Solution Overview
Give a clear and succinct solution of how your product / service will solve the problem for your target customer / audience.
– Slide #5: Market Opportunity
Show the market size and business opportunity in numbers and charts.
– Slide #6: The Product / The Service
Present the product / service that will be sold.
– Slide #7: Market Momentum
Center on future progress, growth, gain in popularity, goals, next steps.
– Slide #8: Sales & Marketing Strategy
Explain how you will reach and sell to your target customer and audience.
– Slide #9: Business Model
Explain how you will make money and the process and route to market.
– Slide #10: The Team
Present your senior team with a job title, qualifications and a photo.
– Slide #11: Competition
Characterise your competitors and show how you are different.
– Slide 12: Financials Projections
For some investors, this will be the important slide, so try and make it easy to understand. Personally, I would present an income statement projection which shows both projected income growth (over the next five years) and net profit, through bar charts. Laying out Revenue and Expenses (wages, marketing, stock costs, premises costs, etc) is advised. So, to sum up, make it visually interesting (no bland spreadsheet screenshot grabs) and use attractive colour combinations for bar charts and the visuals.
– Slide 13: Investment Proposal
Clearly outline what you want from the investor and why. This should include: What you plan to use their investment for; the amount of investment you are asking for in £’s / $’s [keep it realistic], the percentage of the business you will recieve, why you have chosen them [if applicable], whether you want some of their time.
– Slide 14: Thank You
Logo with all contact details including social medias.