As your startup grows, investors will scrutinize every facet of your operation, including the supply chain. Their questions are not just about evaluating the current state but understanding your vision, adaptability, and risk management strategies.
Below are some examples of questions investors may ask. It is important that you are able to answer them (and it is fine to talk about your intent if you are still early stage).
Supply chain
- How do you assess and mitigate the risk of operational shutdowns/slowdowns at your or your suppliers' facilities due to social or ecological factors?
- Do your operations or those of your key suppliers lie in areas prone to environmental risks? How do you plan for these contingencies?
- How vulnerable is your supply chain to scarcity of resources or disruptions in global material flows?
- Are you aware of any emerging technologies or regulations that could disrupt your supply chain? How are you preparing for these changes?
- What measures are in place to monitor and evaluate your supply chain's performance and risks?
- How does your supply chain reflect the company's core mission and business objectives, particularly regarding sustainability?
- Can you identify key performance indicators (KPIs) for enhancing supply chain sustainability?
Why do investors care?
- Accountability: Companies are increasingly held responsible for their supply chain's impact, magnified by social media and stakeholder awareness. B2B customers are now accountable for their supply chain behaviours.
- Sustainability risk: Research shows that supply chains account for an estimated 80-90% of a company’s negative impacts (McKinsey sustainability in supply chains).
- Risk management: A well-managed supply chain and third-party relationships indicate a company's competency in mitigating operational and reputational risks. Supplier code of conduct, oversight protocols, and long-term strategy reduce risks associated with supply chains.
- Capital management: Supply chain sustainability can improve resource management and reduce environmental impact across the supply chain and operations to reduce costs and improve products’ value propositions.
Supply chain regulatory disclosure updates