Investors want to understand what risks there might be to the business. They want to understand your thought process and the mitigating precautions you are taking to reduce those risks. There inevitably are risks in any business plan, so be prepared to answer these questions thoughtfully:
- What do you see as the principal risks to the business?
- What legal risks do you have? Will the business model comply with applicable laws, including expanding privacy protections?
- What technology risks do you have?
- Do you have any regulatory risks?
- Are there any product liability risks?
- What steps do you anticipate taking to mitigate such risks?
Startups that can show they have reduced or eliminated product, technology, sales, or market risks will have an advantage in fund-raising.