Eight Questions to Answer while Looking for a Venture Capital Investment

November 19, 2009

 An article in TechCrunch gave me an interesting overview of the “Eight questions” an expansion stage company needs to answer while looking for venture capital investment. 
Q1: What is the company’s deadly sin? – Or what makes the company’s website or service addictive?
Q2: Where is the money? – Or which targeted markets have the highest revenue and growth potential?
Q3: what are the single customer economics? – Or does the company get more money from a customer than it spends on that same customer in services and support costs.
Q4: what are the Explanatory events? – Or what is the reason for the spikes and the falls in the historical revenue trend line graph?
Q5: Why can’t the company grow faster? – Or what are the factors that limit the rate in which the company can grow?
Q6: What are the accelerating effects? – Or what is the competitive advantage that will help the company keep strong growth rate year over year, rather than experience slowdown as it becomes larger. 
Q7: What is the secret sauce? – Or what intellectual property or license sets the company apart from the rest of the businesses looking for venture capital funding.
Q8: How does the company win? – Or what is the promise that the company gives to the customer and will live up to it to win and retain the customer over time? 

President<br>OnLighten

Konstantin is the President at OnLighten, which specializes in Customer Relationship Management (CRM) and business systems strategy, implementation, integration, automation, and training. He was previously an Analyst at OpenView.