What Questions Will an Investor Ask You? Lessons from Texas Moot Corp

“Are you in the manufacturing business or the technology business?”

The Texas Moot Corp finals were last week.

Congratulations to Solavicta, the winning team, who want to produce a low cost solar power generation system. They made a great presentation and I’m not surprised they came away the winner, even though there were other teams who had terrific ideas and solid presentations.

I took notes of the questions asked by the judges, to shed light on the thinking process of the evaluators. Of course, these questions were specific to the ventures being pitched, but they give a hint of what an investor might ask in a similar situation:

Product
– How will the product hold up over time?
– What is the projected lifetime of the product?
–Have you identified the designers who can solve some of the functional issues?
–Did you search for pre-existing IP? Are there others doing the same thing?
–How did you determine the performance factors upon which this product was designed?

Financial Model
– Explain the fixed and variable costs in your model
–Won’t you run out of money too fast?
–Why are the legal fees so high in your proforma?
–I’m worried that you could grow too fast and go out of business. Is your cost structure right?

Legal
–What is your legal exposure in the event of a product malfunction or misuse?
–Can this idea be patented?

Sales & Marketing
–How will you build the market?
–What is your evidence that your sales model will overcome consumer barriers?
–What is the incentive for customers to tell others about this product?
–You have identified a huge market. Shouldn’t you narrow your focus on a more specific market?
–Are you sure you have identified the right market? Why not…X?
–What are your backup plans if a larger competitor decides to move into this segment?
–Why would customers pay for this service when other similar options are free?

Business Model
–Are you in the manufacturing business or the technology business?
–Is this product priced right? What is your pricing model based on?
–How many of your potential customers will break down into each price category?
–What is your product feature roadmap…how will you expand attributes and features over time?
–Why are you using a flat pricing model versus transactional pricing?
–What lessons have you learned from similar business models in other segments?
–Have you explored relationships with existing market leaders in this category?
–What are your advantages over competitors, other than user interface and simplicity?
–Your business model depends upon partnership with existing providers. Doesn’t that complicate issues for you?

For more on Texas Moot Corp and the Solavicta win, see McCombs TODAY.

Update: Moot Corp is now Texas Venture Labs Investment Competition.

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One thought on “What Questions Will an Investor Ask You? Lessons from Texas Moot Corp”

  1. This was such an excellent source of research for my business studies homework; i had gotten full marks for my business homework. Please keep up the good work which will make me promote your website to others in my local community. Thanks a million. 🙂

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