31 July, 2009

The 10 things which the investors must look for in a startup

1. Good management can make a success out of a bad idea. Conversely, bad management can ruin a good idea.

2. The market that the startup is targeting should have a large potential and should be rapidly growing.

3. What are the barriers to entry for competitors?

4. Does the startup have the ability to become the number 1 or 2 player in the market?

5. Does the product have a clear value proposition for customers?

6. Differentiated offering. How is the startup and its product different from competitors?

7. Is there a clear path to monetization of the idea to justify the valuation?

8. Does the venture have a pipeline of potential customers/partners? A few early customers signed up can be an advantage

9. Can the startup scale to large volumes and become more profitable with larger volumes?

10. Low resistance from non-market factors — government, social organizations etc