Some Questions That Angel Investors Will Ask An Entrepreneur

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The opportunity for an entrepreneur to present to an angel investor group is an honor, since the process of obtaining angel capital is quite competitive. It is important to note that an entrepreneur is encouraged to construct their pitch in a simple, yet effective manner. Too much or too little detail can often lead to confused and uninterested listeners.

In addition, the verbal presentation should be repeatedly rehearsed, since each review will greatly improve one’s verbal and presentation skills. Repetitive practice in front of an audience is important because of the constructive feedback from others. The array of opinions and ideas from eager listeners is very valuable and should encourage the entrepreneur to modify his/her pitch accordingly.

The most intimidating part of meeting with angel investors is answering their questions in a well-devised and concise manner. While some entrepreneurs may accomplish this with ease, others may simply experience anxiety, answering the presented questions with hesitation and doubt. Every new business owner, who is seeking angel capital, should properly prepare for the moment when they meet with angel investors to avoid rejection. Here are some questions that the entrepreneur may encounter:

1. Tell us about yourself and your company.

The entrepreneur should give a brief introduction about him/herself, including credentials and education, and other pertinent background information in their opening. A general idea of the company should then be mentioned, followed by the company objectives, as well as the different products and services offered.

2. Who are your major competitors, and what makes your products and services unique?

Entrepreneurs should be prepared to mention any market opposition and how their products and services will give the business the competitive edge. Since market competition can be relentless, it is always a good idea to provide solid examples.

3. Who are your targeted customers, and how have they responded to your prototype?

Angel investors are always curious of demographical information, including the targeted market and consumer base the new business will appeal to. By creating a prototype of the business idea(s) and welcoming consumer response, the entrepreneur can further refine his/her prototype according to customer feedback. It may take multiple revisions before an actual product is mass produced; therefore, it will be wise for the entrepreneur to recruit potential customers to support his/her sales and even use them as references to encourage their deal with angel investors.

4. What is your marketing strategy for your products and services?

This includes an entrepreneur ’s approach in promoting the business through advertisements, internet marketing and promotions, and public relations to increase sales and achieve a competitive advantage. Marketing can be quite costly, so it is extremely important for the entrepreneur to include this estimated price in the financial plan.

5. How much angel capital are you seeking, and how will this investment amount be distributed?