A Few Questions To Ask Yourself, If You Are Thinking About Venture Capital

1. What is your emotional connection to your target customer, your fundamental value proposition. 
   
   
2. What is your theory of the business? What are the premises and assumptions on which your theory depends? See generally Drucker, P. (1994) The Theory of the Business. Harvard Business Review, September-October 1994, 95-104.

    

3. What is your added value to the entire value chain and are you in a position to capture that value?
   
   
4. What are the potential exit strategies for venture capital investors? How and how soon will they get their money back? What is the potential return and why?
   
   
5. What will be your competitive advantage and how sustainable will that advantage remain over what period of time? Or, how long before your rivals can imitate your strategy? Examples would include patents or copyrights or other legal protections, a territorial franchise, and exclusive contracts. Key issues are appropriability and sustainability
   
   
6. What Name are you going to use and why?
   
   
7. Can you develop two strong advertisements for your product or service, within one week?
   
   
8. Frequently, it is important to ask, With whom can you form alliances, partnerships, or joint ventures and why? Conversely, are you dependent on a compliment (e.g., Microsoft on Intel)?
   
   
9. Are your competitive advantages dependent on your being a private company?
   
   
10. What are your alternatives? Why do you need the money?