Business Plan Business Plan Presentation & Pitch 2 — Questions and Answers
Question 1: What is the 'ask' in an investor pitch?
- A request for product feedback
- The specific amount of funding requested and how it will be used (Correct answer)
- A question for the audience
- A discount offer to investors
Correct answer: The specific amount of funding requested and how it will be used
The 'ask' is the specific amount of funding the company is requesting from investors, along with a clear description of how those funds will be deployed.
Question 2: What does 'pre-money valuation' mean in investor discussions?
- The company's revenue before marketing spend
- The value of the company before new investment is added (Correct answer)
- The total funding raised to date
- The company's projected revenue
Correct answer: The value of the company before new investment is added
Pre-money valuation is the agreed value of a company before new investment is added, used to determine investor equity stakes.
Question 3: What is an angel investor?
- A government grant program
- A high-net-worth individual who provides early-stage capital in exchange for equity (Correct answer)
- A type of business loan
- A crowdfunding platform
Correct answer: A high-net-worth individual who provides early-stage capital in exchange for equity
An angel investor is a high-net-worth individual who provides early-stage capital to startups in exchange for equity or convertible debt.
Question 4: What is a venture capitalist (VC)?
- A business consultant
- A professional investor who manages pooled funds to invest in high-growth startups for equity (Correct answer)
- A government-backed lender
- A strategic partner for operations
Correct answer: A professional investor who manages pooled funds to invest in high-growth startups for equity
A venture capitalist manages pooled investment funds and provides capital to high-growth startups in exchange for equity, expecting significant returns.
Question 5: What does 'equity dilution' mean for founders?
- The reduction in product quality over time
- The decrease in a founder's ownership percentage when new shares are issued to investors (Correct answer)
- The loss of intellectual property rights
- A decrease in company valuation
Correct answer: The decrease in a founder's ownership percentage when new shares are issued to investors
Equity dilution occurs when a company issues new shares to investors, reducing the ownership percentage of existing shareholders including founders.
Question 6: What is a convertible note in startup financing?
- A promissory note that converts into company stock at a future funding round (Correct answer)
- A fixed-rate business loan
- A government bond investment
- A product warranty document
Correct answer: A promissory note that converts into company stock at a future funding round
A convertible note is a short-term debt instrument that converts into equity (stock) at a future funding round, typically at a discount to new investors' price.
Business Plan Business Plan Presentation & Pitch 2
What is the 'ask' in an investor pitch?