What Investors Look For When Evaluating Your Pitch: Mohamed Hamdy Overvaluation or terms that are not reasonable for the investors make a great idea, but is not necessary feasible.
By Mohamed Hamdy •
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
When evaluating any investment there are many things to look for, but I can divide them into the following categories:
1. Team. Domain expertise, technical partners. I don't believe in outsourcing key development tasks. You outsource admin work, not development work.
2. Domain. If I am investing here in the region, I would focus on ventures looking to build a utility- basically infrastructure. Another domain I would look for is very specific verticals that are localized. This approach is time-relevant for the current situation.
3. Favorable investment terms. Overvaluation or terms that are not reasonable for the investors make a great idea, but is not necessary feasible. Covenants and valuations are two variables I would look at here in the region; obviously terms get more complicated in the West.
4. Unorthodox advantage. I would like the team or the startup to start their journey with some sort of a competitive advantage which is not assumed. Potential customers that make sense is not one of them, possible JVs also don't count, until it's actual and confirmed.
5. Other investors. I like tagging along with other investors- only with angel and VC investing. In my PE career, that was not necessary especially if I was looking to implement activism across the board and operations. There's comfort knowing other investors are getting on the same boat- smart ones, I don't want to get in trouble and stuck with fools.
