The right fit: sometimes we don’t choose an investment not because we disqualified the company based on any of the points I mention here, but simply because it isn’t right for us. I may have a particular passion for consumer apps, and you are a green tech company. Don’t take it personally. Keep your feelers out there. Make yourself as visible as possible so investors can find you. Here are some things I look for in a startup’s pitch:
1. A STRONG TEAM Are you able to see this through to completion? Are you truly passionate about it? Is the founding team balanced?
2. A LARGE AND GROWING MARKET Are the market conditions favorable to a strong team’s success if they execute well?
3. CUSTOMER VALIDATION Do the customers in this market want what you are planning to provide?
4. COMPETITIVE ADVANTAGES If they want it, do they want it from you? Can you provide it better than others in order to have a strong foothold in the market?
5. INVESTMENT TERMS Is the ROI potential high enough to offset risk sufficiently? This usually means a multiple of at least 10x in five years.
6. PREPARATION Are the financials well-thought through? Do the founders understand their own business? Are they punctual and professional?