Showing understanding of the business and the market is required to attract the savvy investor. The March 23, 2009 post lists questions that the investor may ask to determine if the entrepreneur did their homework.  This post looks at one of those questions:

What is currently going on in that marketspace (the big issues)?

This question is much more than it seems. This question allows the entrepreneur to talk about the opportunity and potential of the company.  If the entrepreneur just supplies information then they have missed the point.

While it may be obvious how to answer this question and just rattle off a few pat answers, remember that the audience is potential investors. They may be savvier than the entrepreneur in that industry or totally ignorant (in which they may know of experts). Always treat them as “well-informed” but ignorant of your company.  The answer should be concise, but not confined to a listing of the major issues. The audience needs to know why your company is important to the industry and how your company is going to address a problem in that industry.

This question can be broken up:

• What are the major challenges of the industry now?
• What is the future of the industry?
• How is your company going to be affected now and in the future?
• How is your company going to address these challenges and turn them into opportunities?
• What is the expected outcome for your company and possibly, the industry?

This may seem like the entrepreneur is thinking too big.  Is every business going to change the world? No.  This still applies to someone on a much smaller scale.

What about someone opening a restaurant in the neighborhood?  The restaurant industry has challenges and a future. The neighborhood may pose unique challenges to the restaurant which can be turned into opportunities.  It may be challenging to open the restaurant, but the owner has a fresh concept that has proven successful in other similar neighborhoods.  Rather than changing the industry, how would the restaurant change the neighborhood, or the immediate stores around it? Will it cause other stores to open up near it and see even further increase in walk-in traffic?

Once again, in a very concise manner, the smart entrepreneur can inform the investor of what is important about the market, how the company will address it, and how the company will be successful.  Rather than seeing this question as just getting information, this is another opportunity to sell the potential of the manager and the company.