One of the most frequent questions I get from angel investors is related to the parameters that an investor takes into account when investing in a company.
In this column I will seek to describe those factors most frequently influencing the decision of funds and angel investors when placing capital.
These five elements are:
1. A committed team full life – . This is the motivation of the entrepreneurial team is beyond making money. You mean you really have to be passionate about solving the problem to be anyway.
Investors should realize that an opportunity is in front (remember that perception consists of feeling and prior knowledge or experience ) , and it is he who will go up to the sweater of the train.
If entrepreneurs transmitted without the money the project will not move forward , the team will lose investor interest in the team .
Two . Implementation capacity – . Good ideas and talent are not enough equipment when carrying out the project . We must be able to execute the plan.
Two ways to tell if the computer is a good performer is to see his record in getting what he wants. Did they follow the route they plan to reach your goals? And when you leave this plan, make decisions that facilitate growth ?
Second implementation capacity comes to light after the team knows how to measure their results. Incredibly , many teams do not know how to measure their effectiveness in serving the product results .
These parameters let you see what they did , not just what they say about themselves.
3.Equipment prepared – . Having an idea and a beta is not enough. The team should have the skills needed to develop the project essentially in its founding team .
April . Customer Reviews who used the tool . – This is a very important point to consider . As clearly mentioned Bob Metcalfe, inventor of Ethernet co , in his recent visit to NXTP Labs , an innovation is validated at the time it finds users who are willing to pay for it .
No matter if the idea sounds good on paper and the product is well developed , if the end is not what consumers purchase .
At this point the value of the actual customers of the business being evaluated.
The entrepreneurial team must be clear about why customers are willing to pay for the service offered.
May . Scalability – . A scalable startup is one that has a target market large enough to be able to grow and multiply your income exponentially short term mode. That is, a company in one year can be multiplied by 15 or 20 your income once reached breakeven .
This is what I mean when I say that a technology-based company must have an ambitious product.
Once described the 5 criteria to consider an angel investor when investing , I want to emphasize those aspects related to the founding team .
Noam Wasserman studied for over a decade that the founders early decisions can be taken in the early stages of your business to carry very high levels of growth (or failure) . In this regard he wrote the book Dilemmas of the founder.
The main conclusion that emerges from this study is that 65 % of the failures of startups is related to the formation of a founding team wrong and the problems of the founding team .
From my personal experience as an angel investor and through NXTP Labs (fund accelerator program ) , I can ensure that the problems caused by poorly armed founding team are a constant threat to the future of the company.
We recently had the pleasure to announce our fourth exit . Is ComentaTV case . Which was acquired by U.S. Wayin . This is one of the ideal case where the product is purchased by the strength of its technology , however the way ComentaTV was tough and challenging until the founding team that worked on that product was outlined and that business model .