Business Plans

Flat6Labs CEO Ramez M. El-Serafy On The Biggest Red Flags He Has Seen In Startup Business Plans

Flat6Labs CEO Ramez M. El-Serafy On The Biggest Red Flags He Has Seen In Startup Business Plans
Image credit: Entrepreneur Middle East
Flat6Labs CEO Ramez Mohamed at Entrepreneur Middle East's 2015 Enterprise Agility Forum.
Guest Writer
CEO, Flat6Labs
2 min read
Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

The first red flag is when startups have not done their homework in terms of market research, customer discovery, and understanding competition.

The second warning sign is when the startup enterprises we are evaluating don’t have a coherent or fully committed team.

The third red flag is when the sector the startups are addressing is a shrinking or dying market- especially if the product is not scalable to other vertical or geographical markets. We, as Flat6Labs, usually shy away from investing in startups that their product is not scalable beyond a few thousand customers/users. In this early stage we prefer to invest in startups that have the potential to grow rapidly at some point in the future, if provided with the appropriate mentorship, support and capital.

The fourth set of issues we see in startup business plans are fatal hazards. Fatal hazards include stolen IP, local regulatory restrictions, complicated onshore/offshore ownership structures, and unfamiliar jurisdictions. If a startup is planning to use IP that is not licensed or open source to use, this is usually a huge red flag to us. We definitely prefer startups that either develop their own IP, or use an external party IP legally.

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

How to Make a Business Plan and Actually Follow Through