Questions to Ask Before You Go After Startup Funding

When starting a new business, at some point you're probably going to need to raise funds for it, and if you're like most of us, you haven't a clue as to the types of questions you'll need answers to, both for yourself and for your potential investors.

Potential investors will want to know your answers as well, and rather than head into the process unprepared, let's take a step to make you more prepared by listing at least some of the important questions you'll want to have answers to.

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7 Questions that need answers for startup funding

#1 – How much capital is needed?

Knowing ahead of time the amount of money you're looking for simplifies things immensely. Research what your costs will be, project that over your investment time period and add a buffer.

#2 – What will it cost you?

What are you willing to give for this money? Will it be shares of your company, and how much is that? 10%? 25%? This is something you need a firm grasp on, and at least initially not be swayed from.

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#3 – When does it get repaid?

What is the time frame for this initial investment? Have you got ample time to pay the capital investment back, using either a fixed repayment plan, when you sell the company, or more flexible options.

#4 – What's your business growth strategy?

You and your investors should be quite interested in what your plan for growth is. Not only is the plan of importance, but also the time frame for growth.

#5 – What are you willing to risk?

Are you willing to put up equity (other than sweat equity) in your startup? This can sometimes make things easier for others to see their way clear to invest.

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#6 – How much input do you want?

Making it crystal clear from the beginning how much outside input is wanted is a good idea. Many investors really want nothing to do with this, but there are others…

#7 – Can you name your target audience?

Having the ability to clearly identify your ideal customers is a comforting sign to prospective investors. It goes a long way toward helping them know that you really do have a handle on your business!