
Questions you have to answer correctly to get funding for your startup - ivanbrezakbrkan
http://whoapi.com/blog/439/26-questions-you-have-to-answer-correctly-to-get-funding-for-your-startup/
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div
> "Why don’t you sell your house/company/whatever if you believe that much in
> your product?"

How is believing in your product an excuse for not trying to minimise risk.

Especially if you know that most startups fail, there's no good reason not to
hedge your bets when it comes to stuff that's at the base of the Maslow
triangle.

edit: logic error :)

~~~
themenace
"How is believing in your product an excuse for not trying to minimise risk.
Especially if you know that most startups fail, there's no good reason not to
hedge your bets."

Would you agree that this would not be a good answer even if it is the reason?

Some gentler ways to answer:

\- Keeping my house gives me a feeling of security so I can devote all time
and energy to the startup.

\- My heavily mortgaged house is not nearly enough to fund the startup.

\- Keeping my house is not unreasonable when I am already investing an
enormous amount of my time and energy and my life into this.

\- I might indeed sell my house but I don't think I'll need to. I feel that
this startup is a great investment, and I think investors will agree.

Anyone got a better response?

~~~
mluiten
How about: the security provided by an unconditional roof over my head and
food on the table allows me to use my abilities in problem-solving and
creativity, according to Maslow's hierarchy. [1]

[1] <http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs>

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amirmc
" _Why should I invest in you instead of hiring 1/2/3 people and outsource the
whole project?_ "

Most of the questions seem sensible but the one above seems really out of
place (and would put me off whichever 'investor' asked it). Has an approach
like this ever worked?

Having said that, it's nice to be reminded that there's a world outside
SV/London where people can actually get started (and funded).

~~~
elliottcarlson
I came to comment on that exact same question - so not only will VC's not sign
confidentiality agreements, but they can ask something like this? I'm curious
if there are instances of this happening?

~~~
BerislavLopac
So the right answer to that is "because you are a professional and honorable
business man, and not a sleazy bastard". ;)

~~~
ofca
I'd say the right answer is something like this : 'Because if you do that we
will kick that other team's ass and you will regret it. We are the best people
for this project and we will kill ourselves to make this product the best in
the world.' I guarantee you he would invest in us at that point. :)

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ofca
You forgot the most important question > 'WHY? Why are you guys doing this
that will probably fail, take you 10 years to realise it failed and cause you
gastric ulcers of massive proportions?' If they fail to convince me here, I'd
turn them down.

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chris_dcosta
gastric ulcers - ouch! Is that all I can look forward to?

~~~
anthonyb
Gastric ulcers are caused by a bacteria (Heliobacter pylori), not the stress
of running a startup.

~~~
ofca
bacteria are caused by a lack of immunity that is caused by the stress of
running a startup :)

~~~
anthonyb
They're still easily treated with antibiotics. I'd hate for someone to quit
their startup because they thought that stress was the primary cause.

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GoranDuskic
@amirmc Actually we were asked that question (outsourcing your project) couple
of times. There are few more than tricky questions. You really have to think
hard when someone asks you "What if someone copies your service, and offers it
half the price?". Every question is a different test.

@ofca I totally agree! If you don't know the "WHY" there's no point in
starting anything! There are lots of other important questions as well.

~~~
BerislavLopac
I once read a great comment that when a VC asks "what would you do when Google
enters your field", the best answer is "what would you do when Google enters
yours"? <http://www.googleventures.com/> ;)

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paulitex
> "Can you see your company becoming a 10 million dollar company?"

This number is much, much too low. 100M or 1B is the common question in North
America.

I've been told by a number of early investors that they seriously worry about
investing in companies that get to 10M or 20M and then plateau.

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B-Scan
This guys are a great example of how to create a startup and get funding in
countries like Croatia where the access to VC/angel money is limited. To start
globally (when you are outside of US) is much harder then many think.

~~~
einhverfr
My small business has always been global and now I am starting to look at
expanding quite quickly. Now I am in a position where I may even be able to
execute some ideas that might be of interest to investors.

The question of whether to go global at first is really a very hard question.
I think it absolutely depends on the business. Many businesses would benefit
by starting locally and working closely with customers at first before going
global. Many other businesses would benefit by going global right away. Making
the right decision here is sort of tricky.

Now, one thing to note is that this isn't an all or nothing question either. A
smart business will globalize where it makes sense and localize where that
makes sense. For example, if I am going to go and provide (or send someone to
provide) training, I am not going to send someone half-way around the world
for a short-term training contract. On the other hand, sponsored development
on LedgerSMB is easily global. Payroll subscription services will naturally be
a series of local offerings, while technical support for PostgreSQL can be
more easily a global one.

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Maro
Also look at the Sequoia's "Writing a Business Plan" page, it's the best
"checklist" to keep in mind, even if you don't actually write a business plan:

<http://www.sequoiacap.com/ideas>

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JacobAldridge
I particularly like the reinforcement that there are at least 17 other
questions that need to be answered (whether asked directly or addressed by you
proactively) _before_ they even want to see the Executive Summary.

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wiradikusuma
i looked at the questions, and said to myself, "oh shoot, i dont know the
answer to many of the questions!"

honest question, anyone care to share their answer especially for question:
why not sell your house, why you're better, what if somebody (startup/big guy)
copy your idea with less price, why cant i pay somebody to do it (outsource),
without sounding cliche or boasting?

~~~
fvryan
\- Why not sell your house? \-- "We're really focused on the business and are
trying to limit outside distractions, like where is my family going to live,
or how am I going to drive to meetings. But liquidating some assets is always
an option"

\- Why are you better? \-- This is going to be different in every situation,
especially if you're entering a crowded market. This is your secret sauce.
Ideally team expertise should be a part of your response as well.

\- What if somebody copies you at half the price \-- "It's true others will
always try to copy us if we are successful, but we have a 2-year product
roadmap. If they do copy us, we will always be a step ahead in our roadmap.
Our roadmap is so important because our team has "X" experience in "Y"
customer pains." And if your product isn't core to the "Big Guys" business you
could always mention that and say that they won't be able to focus on the
specific problem the way you will.

\- Why can't I outsource? \-- You should definitely boast about why you are
the team to solve this problem. Investors are pretty optimistic and they get
super excited about awesome teams. You want to give them reason to believe
that you have experiences relating to the problem you're solving that others
won't have. This will also allow them to boast to their friends/other
investors about team/product they just invested in. And can help you round up
others for your round.

Just a few examples. Hope some of this helps!

~~~
wiradikusuma
wow, thanks man! your answer about not selling the house is very diplomatic :)

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HilbertSpace
In the US, for Web 2.0 projects, mostly can boil down to just one question: Do
you have traction that is significantly high, say, over 100,000 unique
visitors a month, and growing rapidly?

