A founder meets a lender with a plan, a forecast and considerable enthusiasm. The first three questions go well.
The fourth is what does it cost you to acquire a customer. She does not know. The fifth is what proportion of customers buy again, and she does not know that either.
The application does not proceed. Nothing about the business was wrong. What the meeting established was that the founder does not have the information anybody would need to assess it.
1. Know what the money is for, specifically
Not growth. A named use, with a figure and an expected effect. Vague purposes are the fastest way to end a funding conversation.
2. Know how it will be repaid or returned
From what, over what period, under what assumptions. This is the question behind every other question a lender asks.
3. Know your own numbers without looking
Revenue, gross margin, customer count, average order value, acquisition cost and repeat rate. A founder who has to check is a founder who is not using them.
4. Know what a customer costs to acquire
The single most revealing number in a first year business, and the one most founders have never calculated.
5. Know what a customer is worth
Over a realistic period, with the repeat behaviour you have actually observed rather than what you hope for.
6. Know where customers actually came from
By source, with numbers. This tells a funder whether the growth is repeatable or whether it was four favours from former colleagues.
7. Have a forecast you can defend line by line
Every assumption traceable to something observed. A forecast with an unexplained growth curve is read as a wish rather than a plan.
8. Know what happens if it goes badly
The downside case, what you would cut and how long the money lasts. Being able to discuss this calmly improves credibility considerably.
9. Have the paperwork ready
Accounts, management figures, bank statements, forecasts and anything about the structure. Delays in producing these read as disorganisation.
10. Understand what security is being asked for
Personal guarantees, charges and what they actually mean. Founders agree to these without understanding them and should not.
11. Know your competition honestly
Naming none is worse than naming three. A founder who says there are no competitors has not looked or is not credible.
12. Know your pricing rationale
Why this price, based on what. This is where a first year business is most easily exposed, because a price set by looking at competitors cannot be defended when somebody asks what it is based on.
13. Be ready for the diligence questions
Data handling, contracts, insurance and compliance, which is the same scrutiny set out in ai chatbot security questions to ask a vendor.
14. Capture the data from the first enquiry onwards
An assistant that records where every enquiry came from, what was asked and what happened next gives a founder the numbers a lender will ask for, built up from month one rather than reconstructed the week before a meeting. That capture discipline is set out in handling your first enquiries properly and the wider choices in deciding what to automate in year one. The same funding conversation for families appears in care fees and funding questions families ask. See features, start at try, and the sector view sits under startups.