What an investor wants to know

How easy is it for competitors to copy your product or service?

Being prepared to answer this and other possible questions from investors helps create a good impression.

The following topics are likely areas of interest to investors.

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Your long-term vision – Investors will want to see that you have a strategic plan setting out your vision for your business over the next five to 10 years. Your plan should include where you are now, how you got there, initial sales, when you expect break-even and profitability, when and how to exit, at what price, and what will the return on investment (ROI) be.

Business history – Your business experience will be of interest to investors. They will also be interested in where your business stands on the current product or service lifecycle. Keep records of all the time you spent on your business and what you were doing at that time.
Market size and competition – You’ll need hard facts to support claims about market size and you should list all existing and potential competitors. Focus on why you are different and better.
Barriers to entry – Investors will want to know how easy it is for competitors and imitators to copy your lead. They will want to see high barriers to entry.
Business potential – Single product businesses are seen as high risk so show that you are developing your product or service, including items on the drawing board.
Funding and finance – How much money do you need and for how long? What will you use it for? Investors will also want to know your current financial position.
Regulations – Are there any regulatory hurdles you currently face or are on the horizon? Investors will also be interested in any positive regulatory spin-offs for your business. Show that you have done your research.

Your board – You need to consititute a board for your company (it is usual that board members are paid). Look for members who are serving or have served on well-known company boards - preferably for international companies. Try and get at least one well-known name and members with good business connections.
Advisors – Who is giving you direction and advice? Having credible professionals add value to the business, assuring investors that you are prepared to get, and listen to, quality advice. At the least ensure you have a lawyer with investment experience and an accountant.
Teamwork and leadership – You need to show passion and leadership to convince investors you can inspire loyalty and dedication in your team. Investors will probably visit your business to see how your team behaves. Solve any outstanding issues.
Compatibility – Investors will want reassurance that they can get on with you. Your previous partnerships, experience in large companies and personal attributes will come under the microscope. The more you can demonstrate or document in this regard the better.

Technology – Investors will want to see your technology. They’ll ask about your technological advantage and your competition’s capabilities.
Intellectual property (IP) – The IP of your business may be the most valuable asset you have. Make sure you actually own the IP you think you own and that your employees don’t think they own it. Seek professional assistance to ensure it is protected.
E-business – Regardless of whether it’s to change your business model, create revenue streams, lower your costs, lift efficiency or improve communications, your internet-based capability will be a topic investors will want to discuss.

DIY intellectual property
Small and medium enterprises often fear that protecting their intellectual property (IP) will be a long and expensive process, says Paul Carroll.