What Questions You Should
Does your proposed business have a realistic chance of growing into a
Do you have the
needed to run this business? Are you committed to the business's success?
Do you have time required to learn
what you need to learn?
Have you thoroughly researched your potential market to determine whether
there is a need for your product at a price which is acceptable in the
marketplace and will be profitable to you?
Have you selected colleagues who have relevant qualifications and experience
and who will work well together as a
Can you afford money needed to
hire staff or to pay consultants?
Do you understand that a
venture capital firm will invest in your business only if it sees that
it can make a significant profit by doing so?
Do you have the support of your family and friends?
What Questions Venture
Capitalists Would Ask?
Is there written and
Are there current
cash-flow projections prepared and reviewed by an outside consultant?
Does the business concept to be based on a
sound technical and
Is the time
to reach positive cash-flow longer than the ideal term in their investment
adequate financial resources
If the business opportunity is based on a proprietary technology, is the
proprietary position adequately
Is there good
among the principals?
Do the personal
of the principals match the capacity of the business?
The reality check
is a benchmark scoring system that sets a baseline and establishes the
strategic thinking and tactical work required to achieve the goal. As the
first step, you should organize your thought about your new business, and
especially the reasons why you want to
start a new venture. You need
particularly to have a clear idea of what your company's success ingredient
will be. You should particularly assess whether your project is viable by
asking yourself some simple, yet significant questions (see the table on
You need to answer these questions honestly and objectively if you want to be
able to understand the risks and the rewards of starting your own business, and
to appreciate the difficult tasks that lie ahead of you. In considering these
questions you will benefit considerably from talking with other entrepreneurs,
your accountant, your solicitor, your banker and any
These talks will also help you prepare yourself mentally for starting your
business. Additionally, venture capital firms who consider funding your venture
will probably ask you many of these same questions. If you have thought through
the answers to them in advance you will equip yourself to convince these firms
that you do understand what you are about to do and are prepared to make the
necessary commitments and sacrifices.
questions venture capital
companies would ask while making the reality check of your business proposal
are listed in the table on your left.