HQQA054 How quickly are revenues growing? What is fueling that? What are the bottlenecks?

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How quickly are revenues growing? What is fueling that? What are the bottlenecks? – Sustainability is very important

Here’s what they mean…

Investors are getting interested in you and so they want to know more information. This is why they would ask you questions like these; “How quickly are revenues growing? What is fueling that? What are the bottlenecks?”

They may even be getting excited by this point, but they still need to make sure that the fundamentals are here.

If you are growing faster than the industry average, then you already have their attention. But if you are growing by doing Groupon every week then you smell.

If the “fuel” is word-of-mouth then you’re very special indeed.

The question about bottlenecks is merely how can you grow even faster if you can remove them. That investors’ money is one way of removing the bottlenecks. The bottlenecks can be all sorts of different things, depending on your business model. It could be hiring, it could be funds to blow on marketing etc. Your architecture being total rubbish and you have so much technical debt that Greece feels bad for you is a really bad bottleneck.

You want to be structured when you answer questions. You can start by explaining

  • What your revenue is presently
  • How much it has been growing MoM and YoY
  • Explain how you make money
  • Drive into why componants of your revenue are improving. It could be more users, increasing your pricing, expansion revenue and the like
  • Are there any new industry trends?
  • What channels are you acquiring customers by and how are they working out?
  • Explain the challenges you are having in scaling

What you need to say

“Our one-year CAGR is 40%, for the past 6 months, we have been growing at 50% MoM.

We make money by selling Snapchat credits for filters. We charge $5 per filter.

Things have really been beginning to pop since we started our buy one get one promotion. Customers really seem to buy into the social good that we are doing by giving free Snapchat credits to starving children. I wish that we had thought of this earlier.

Really the only thing holding us back is the fact that the starving kids don’t have enough data access. We could improve our sales cycle dramatically with drones blanketing wifi over the continent.

We also have some scaling issues. We are looking to hire a more experienced lead engineer who can more effectively do sharding.”

Financial questions for startup fundraising accountant


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