Wednesday, July 19, 2006

Venture Funding Evaluation sheet

Very good job. I had never seen any one summarize this as good as this. Thanks Forbes



1. Market Opportunity: Investors tend to look for huge markets (at least $500 million) to exploit or a market that is growing at a rate far exceeding the norm (at least 10% per year).

2. Marketing/Sales Strategy: Investors want to see tangible evidence that the company can peddle its product or service.

3. Competition: Investors want a balance between having competitors (which implies that others see a similar opportunity) and a host of well-heeled challengers that could crush you.

4. Entrepreneurial Experience: Does the team have any experience in building or running a company? Have they paid back previous investors who took a risk on them?

5. Management Team: Investors look for a team with an impressive track record that leaves little doubt they can accomplish their goals.

6. Founder Commitment: The more time and money founders invest, the more convinced investors will be about their faith in the venture.

7. Directors and Advisers: Successful companies are able to attract both quality board members and advisers--not just résumés, but those who are committed to adding value to the company.

8. Financial Projections: Investors want to see promising--and reasonable--financial projections.

9. Investment Value: Investors want to understand how a company will use their money--and if that strategy has a chance of generating good returns.

10. Accomplishments: A catch-all bucket. One crucial element: Securing agreements with the right strategic partners that will fuel a company's growth.

11. Corporate Structure and Ownership: The type of corporation, location and ownership structure of a company often plays a large role in attracting investors.

12. Intellectual Property: Patents, trademarks and copyrights are attractive barriers to entry.