Fri, 17 September 2021
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
In pitching your business, investors will ask questions about metrics such as customer acquisition cost, lifetime value, and churn rates.
The purpose of the question is to discover what systems you have built into the company and how robust they are.
In the early stages of a startup, the CAC, LTV, and revenue growth metrics are not impressive.
Instead of focusing on the metrics in the very early stages of the startup, talk about the fundamental systems already in place.
Describe your system for acquiring customers and how it works.
Detail how you deliver the product/service.
Show how many of the users so far continue to use the product/service.
Instead of relying on numbers, go to the next level and describe the systems you have.
Investors are not expecting big numbers but instead, look for a company with systems installed and working for the core functions.
The core functions are acquiring customers, delivering the product or service, and providing support to retain those customers.
Look at your business as a series of systems.
Present your business to investors in that manner as it gives a clearer picture of how far along you are.
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