Part 17/20 - Twenty Questions You Will Be Asked By Venture Capitalists (If You Get That Far)

By Laurence K. Hayward

This is part seventeen of a twenty part series on this topic.

17. What is the anticipated lifecycle of your product or service offering? What are current and future plans for R&D investments?

All great things come to an end. Products mature, competitors offer substitutes and customers’ demand change. Have you anticipated when the earnings power of your product will run its course -- for first-time buyers as well as for follow-on sales to existing customers (e.g. upgrades)?

For early-stage companies, the most critical question is how you will get customers to repurchase or renew after the first usage. Once you’ve thought through that issue, then focus on related matters, such as your plans for R&D investments. How will you continue to generate revenues when existing products run their course? Many companies fail to include the costs associated with continued R&D in their financial projections.

Laurence K. Hayward is the Founder and CEO of TheVentureLab. To learn more about him follow the link here