What if Google enters your market: How to answer this question by Investors

“What if Google enters your market” – is among the top scariest questions asked by investors and founders often struggle to take this conversation to a meaningful level. Below thread provides you some great perspective.

1/ One of the trickiest parts in a fundraising pitch is what to say when investors bring up an issue that is about a fundamental, unavoidable risks.

Every business at every stage has them, things like “what if Google enters your market?”, “what if CAC goes up”.

2/ My initial instinct is to turn these into discussions. “Great question, that would be bad, what do you think we should do?”.

I have noticed that devolves into a long, negative conversation that doesn’t resolve the issue and makes it seem like an even bigger deal than it is.

3/ What works is to have strong counter arguments that don’t leave too much room for discussion.

Question: what if Google enters the market?
Answer: Google has shown they don’t care about this market, the last 5 products they launched were a flop and it’s a huge market anyway.

4/ Another example from the @BankMercury seed raise was:

Concern: “SMB CACs are too high”

A: “We focus on startup founders that are in community with strong word of mouth. We also make >$2k/yr in revenue from a funded co and SMB CAC in comparative fintech products is $200-$300”

5/ The key is to have real counter arguments that you believe in. This informed confidence is the key to fundraising.

Best way to get there is to practice and iterate your answers.

Anyone have other fun, hard-to-answer fundraising questions?

Follow @immad

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Author: NextBigWhat

Source : https://nextbigwhat.com/what-if-google-enters-your-market-how-to-answer-this-question-by-investors/

Date : 2020-08-29T05:37:59.000Z