Here are questions I ask my clients when helping them develop business plans to raise capital:
- What are your goals for the business? Is there a revenue number you’d like to hit? Do you want to sell the business, and pull out some amount of personal wealth? Do you have other motivations (e.g. fame, press, a bridge to other opportunities, etc.)?
- Who is on your current team, and why are they uniquely qualified to execute your plan? As you expand your business, what are the key management roles you’ll need to fill? Have you identified candidates for those roles yet? Do you know what the cash / equity compensation will be?
- Do you have recent data on the size and growth rate of your industry? What are the key trends driving the business?
- What customers will you be targeting? Can you prove that they’ve got unmet needs
- What will be your unique positioning within the market?
- What businesses most closely resemble the one you will build? Do you have data on how they built their business, including the evolution of their product lines, distribution, and revenue
- What will your product offering consist of, and how will it evolve over time – including categories and price points?
- What’s your marketing strategy?
- What are the unit economics of your business? What does an average sale look like in terms of revenue and variable costs? What’s your break-even volume?
- What’s most likely to go wrong with your plan, and how can you prevent it from happening? How have similar companies failed / what obstacles did they run into?
- Who are your competitors? How are they doing? How will you differentiate yourself from them?
- What are the next phases of implementation? What tangible milestones will you aim for in each phase?
- What have you accomplished to date that helps prove you are capable of executing against your plan? That can include: the team you’ve built, distribution channels and performance in those channels, revenue, branding, etc.
- To what extent have you projected your future revenues? Expenses? Team structure? Distribution?
- How much capital are you raising in the current round? Where will the money get you? How will you spend it? Will you need additional funding? When? How much?
- What’s your exit strategy? Who will buy your company? Why? What will they pay? What transactions can you point to that lend credence to your exit strategy?
- What is the valuation of your company today, and the basis for that number? How much equity are you willing to give up to new investors in this round?