Sometimes you learn more from the questions
than the answers.
This was certainly the case at the Tech Coast Angels Fast Pitch Competition at UCLA last Thursday. In this competition, ten finalists are selected to give a 90-second pitch on their start-up. The presentations are rated on investment potential and presentation with members of the TCA holding up cards like a gymnastics or figure-skating competition. Afterward, the raters ask questions of the presenters.
If you are curious about the types of questions investors would ask but you couldn’t fly to Los Angeles, or didn’t buy your ticket before the event sold out, here are some of the questions I found most interesting.
If you are thinking of starting an e-commerce site or app, be prepared to answer these questions:
What is the cohort retention? How many people come back one week, two weeks and thirty days?
How do you get customers? (e.g., advertise on sites targeted toward your customers, do you offer a free download and then they can pay to get extra content – “freemium”)
What is the cost of customer acquisition? That is, how much money do you spend on marketing for every paying customer?
How are you looking at customer acquisition costs versus modeled life time value?
What is life time value of a customer? That is, for each customer you acquire, on average, how much money will you receive from sales to him or her.
Does your e-commerce website include an app? How will you maintain ranking within the app store? How do you keep from being a very popular app that then goes to zero?
If you have a better version of an existing product ….
Who are the entrenched competitors and how do you plan to compete with them?
Why would somebody spend to buy your system versus just going with the competitor?
How and why did you choose the price you are asking for your product? Have you tried different price points? Higher? Lower?
How long have you been working on this product? How much does it add to the price of a product?
What specifically does your intellectual property protect?
If you have received previous funding, what has it been used for?
Is this a business to business opportunity or business to consumer?
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Do you have answers to these questions? Well, maybe you should.