the ultimate investor checklist for entrepreneurs

The Ultimate Investor Checklist for Entrepreneurs

A YOURSTORY E-BOOK

The Ultimate Investor

Checklist for

Entrepreneurs

Investors ask a whole lot of questions before putting their faith and money

into a startup. If you are an entrepreneur seeking funding, it is imperative

that you have the answers at your fingertips to convince them that you know

what you are doing and are serious about the business.

YourStory is proud to publish this extensive list of frequently asked questions

from investors, compiled by Bala Satish, Co-Founder of MyDreamStore,

which is guaranteed to help you prepare a solid and convincing pitch.

Compiled by Bala Satish, Co-founder, MyDreamStore

@satish_dreamer

© Bala Satish │ Published by YourStory Media Pvt Ltd

For more such e-books, write to [email protected]

https://mydreamstore.in/

mailto:[email protected]


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Problem Statement

What is the problem you are trying to solve with your service / product?

Is the market ready for this kind of service/product?

Market Size (Is the Market Big Enough?)

What is the market size?

What do your market segmentation charts look like?

What is the customer segment you are targeting?

Competition

What is the competitive landscape like?

What is your unique selling proposition?

Are you the first/early mover?

Why is nobody else doing what you are doing?

If it is a ‘me-too’ model, what is your moat? (Do you have patents or any other killer advantage?)

○ What if somebody else comes into the market with more funds?

○ Can someone easily replicate your model?

What kind of brand building activities have you planned?

What is your customer acquisition strategy?

What is your customer retention strategy?

Business Model

Who are your paying customers?

What is your revenue model?

Are there any risks in the model?

What is the unit economics like?

What is the cost of customer acquisition?

What is the customer lifetime value?

Product/Service Description

Where is your MVP?

What do your customers say about your product/service?

How many similar consumers do you expect to bring in?

Is there any wastage/refund/return involved?

How do you ensure the quality of your service levels?



Scalability

Is your solution scalable?

What are the bottlenecks to scale?

o Manpower o Infrastructure

o Setup/Hardware costs o Other industry bottlenecks / regulatory

What is stopping you from scaling right now?

Requirement of funds

What amount of funding do you need?

How are you going to deploy your funds?

When are you going to break even?

When are you going to be cashflow positive?

Financial Condition/Revenues

What are the set up/ fixed costs?

Do you have an asset-light business model? If so why/if not, why not?

What are the non-performing assets (NPAs) on your balance sheet?

What amount of cash do you have in the bank?

What is the current burn rate?

How many months do you have before you run out of cash?

What are the milestones for this funding?

What is the projected burn rate post funding?

How do you plan to split the funds across operating cost/marketing/technology?

How long do you think this money you are planning to raise will last?

Funding Details

What is your proposed pre-money valuation?

How much equity are you willing to dilute?

What is your proposed exit strategy?

Team Composition

Describe the skill set and background of founders and core members.

How do the founders know each other / how long they have been together?

What aspect of the business is each founder responsible for?

What is your team composition?

Who is the CEO? / Whose decision is final in case of non-resolvable issues?

Do you have domain expertise?

Is your business people-dependant?

Do you have ESOPs for your employees? If yes, then what is the structure?



Technology Details

Who takes care of technology? Mention team details.

How scalable is your platform?

Is your platform stable?

○ How many concurrent users can it handle at present?

Is the platform mobile-responsive?

What is your technology stack?

Where do you host right now?

What is your mobile strategy?

Will users be interested in installing such an app?

What is your marketing plan for app-installs?

What are your projections on app installs?

Do you have a product mock-up? If yes, then can you share details about it?

Behavioural Questions

What is your mission?

Why are you excited to do this?

Details on Key Metrics

Users

Returning users

Bounce rate

Transactions

Ticket size (Transaction value)

Revenue run rate

Gross profit

Current burn rate

Cohort analysis

Customer acquisition cost

Customer lifetime value

Conversion rate

Click through rates in advertising

Testimonials

Term Sheet Details

Internal rate of return

Right to first refusal/Right to first offer

Tag-along/Drag-along rights

Liquidation preferences

All the best with your fund-raising efforts!