A number of years ago, while I was in engaged in raising capital for my company, I was on a golf course (where you often find yourself in these situations) with a few potential partners.
Up to this point, I had developed an exhaustive business plan, rehearsed and mastered the pitch and the ask, and felt like I could talk about any aspect of the business and the industry.
While we were lining up for a putt on an early green, one of the investors turned and asked:
"What would be the first thing you would do if you had the money you need?"
I was a little taken back, because my plan was to invest money across the business, in all areas where we needed capital. I had an investment breakdown in my business plan, so "the first thing" I would do is spend money here and there and everywhere.
What he was really asking, however, was if I understood the most important needs of my business and if had a plan to prioritize how I spent his investment. I did not have a clear, compelling answer for this -- I was not prepared to say:
"The very first thing I would do is ..."
In reality, no investor wants to throw a ton of money into a venture without priorities clearly set by the management team. And, entrepreneurs that are most successful have clear goals around a strict bootstrapping strategy (do more with less).
Another important understanding of this question is to really understand the most important needs of your company. Finding a better nice office, hiring a general manager, or building a prototype are great goals, but the focus should be on growing a client base and proving market need (and ultimately generate revenue).
No customers or market need? There is no need for anything else.
What do you think? Have you ever been pressed with this question? Share your story or feedback with others in the comments below.