You're considering investing in early-stage startups. How do you prioritize your evaluation criteria?

When considering investments in early-stage startups, I prioritize the following criteria: + Team: A dedicated, passionate, and skilled team is crucial. They should have a clear vision and the ability to execute it + Market Potential: The startup should be targeting a large and growing market + Service: The product or service should be unique, innovative, and have a clear value proposition + Traction: Evidence of market validation, such as user engagement, revenue, or strategic partnerships, is a positive indicator If you have any additional thoughts or contributions, please reply to this comment. I always appreciate and look forward to hearing more from you. Thank you!

When evaluating early-stage startups, the founders' vision is my top priority. Their vision tells me where they want to take their company and how they plan to get there. A clear, compelling vision shows they’re passionate and have thought deeply about their business. It’s not just about ideas but also about their drive and ability to inspire others. A strong vision aligns the team, attracts investors, and keeps the startup focused. In short, I look for founders who can see the big picture and motivate others to help turn that vision into reality.

See if there is a good cultural fit and what lengths are you willing to endure to support the company should things go south. NEver goes according to plan

A founder’s vision is an indispensable asset for startups. Here are three key breakdowns that I want to add: 1. Commitment and Passion: Founders must focus 100% on their startup without distractions and be passionate about solving the problem, which is one of the most crucial criteria. 2. Prior Experience and Knowledge: Understanding sector dynamics and having the know-how to execute their plans is vital for founders. 3. Clear Target to Reach: With commitment, passion, and knowledge, having a clear future target is essential. Founders should set ambitious goals and persistently strive to achieve them.

When investing in early-stage startups, I prioritize market potential by looking at three key aspects. First, I assess the size and growth of the market—is there a real demand and room for expansion? Second, I consider the startup's ability to capture this market—what's their unique value proposition? Lastly, I evaluate the competitive landscape—are there barriers to entry that give this startup a sustainable edge? Balancing these factors helps me gauge the potential for substantial returns while minimizing risks. It's all about seeing the bigger picture and spotting opportunities where others might not.

Founders' vision on impact is my #1! It helps if the founder is solving a problem that he/she has been exposed to him/herself. That increases staying power and resilience in hard times.

Size and Growth Potential: Consider the total addressable market (TAM) and whether it is large enough to support significant growth. Market Trends: Look at current and future trends that could impact the startup's market. Favor industries with upward trends.

This is an utterly over-considered factor. Makes no sense. How a start up recently founded, in a crowded market, with a few users, no funds, and MVP could be projected to take a chunk of a Market. The best case scenario (potential unicorns only) could take years to understand the company's growth. All these calculations based on 4x YoY growth starting at 1 client are totally BS.

Understanding market potential is crucial and should be done carefully. This means looking at market trends, using reliable data, checking if the startup has a unique edge and can execute its plan well, assessing risks, and reviewing financial goals. A thorough approach leads to better and more successful investment decisions.

When evaluating early-stage startups, I prioritize product innovation by focusing on its uniqueness and potential market impact. I look for a clear problem-solution fit: Does the product solve a real problem in a new way? I also assess the scalability: Can the product grow with the market? Lastly, I value the team's vision and passion for continuous innovation. A great product is built by a team that’s not just solving today's problems but is also excited about evolving to meet future challenges. This approach helps me identify startups with both immediate and long-term potential.

Scrutinising the innovation behind a product/service begins with identifying whether it's "innovative" or simply "creative". Many a times, creativity and a flair for customer satisfaction can tower over innovation coupled with an unclear path to market/scale.

Value Proposition: Assess the uniqueness and value of the product or service. Does it solve a real problem or meet a significant need? Product-Market Fit: Evaluate the evidence of product-market fit, such as user adoption, retention rates, and customer feedback. Competitive Advantage: Identify the startup's competitive edge. What makes it stand out from competitors?

Assessing product innovation means looking beyond uniqueness. It's important to see if the product has a real technological edge, can grow, and has a clear market strategy. A proven product-market fit or a solid plan for achieving it is key for long-term success.

Clearly the product has to add value but newness isn’t sufficient. No one has ever heard of gablinger’s beer even though it was the first low cal beer and everyone has heard of miller lite which succeeded where gablinger’s failed. Being new isn’t enough, it’s necessary but not sufficient

Business model innovation tends to be an area that can truly disrupt incumbents and create value! This is where most startups spend their time, unless they have a true technological advantage from a breakthrough. Otherwise, it comes down to execution. And one of the best approaches a startup can use when competing against the big corporates is breaking the traditional business model of the industry.

A Business Model as defined by Alex Osterwalder provides the startup and the investors with a complete picture of the main components of the business. It starts with a clear understanding of the customer segments, an offer that provides a lot of value to them, the right channels given the audience, a strong and effective ability to create long lasting relationships with customers, more than one revenue stream, including some type of recurring revenue, well defined and optimized business processes, resources required to launch and run the business, with special attention in getting the financial resources that will carry the business until break-even, win-win partnership and a sound cost structure, with clear preference for variable costs.

While the business model is a key indicator of a startup's success, it's important to acknowledge that this model can evolve over time. Changes may occur due to the development of similar products/services in the market, market maturity, or moves by competitors. Updating and refining business models can be essential to maintain a competitive edge and adapt to market dynamics effectively.

The logic of the business model and the logic of the product/service roadmap is also a key factor for me. Demonstrating that a certain path of sales will produce X revenue and will be used by the company to follow its roadmap. That's an indicator of sensible management.

Revenue Streams: Examine how the startup plans to make money. A clear and sustainable business model is essential. Scalability: Consider how easily the business can scale. Scalable business models can grow revenue without a proportional increase in costs.

I have had several casual debates over whether a failed previous start-up is a good or a bad indicator of a Founder's potential. I believe in today's day and age, start-ups are incorporated as quick Bombay gets flooded on a rainy day. So while having a prior start-up (although failed) does show a glimpse of entrepreneurial thirst and bravery, it does got guarantee a Founder's abilities to establish and grow a new venture. What do you think?

In the early stage, a startup's main asset is its talent (founders, team, network & investors)! A great team drives the execution, and the business plan. When it comes to assessing execution capability, one of the main factors is how fast they could scale (it may vary across segments) - an effective "implementation" of a great GTM strategy, finding the right PMF, and so on. To achieve this, startups will need a hard-working team, clever founders, and ecosystem.

Execution is everything!!! Much more than the idea, short of a breakthrough technology that has been created by the team. Execution in the early days is all about cycle times and velocity! The faster the cycle times, then the results compound significantly. These cycle times are the build, ship, learn, iterate, repeat. This is the pursuit of finding PMF. Velocity matters, because the speed is critical but so is the direction! You dont need to be precise, but you need to be moving and gradually honing in on that destination (PMF). If moving quickly but meandering and spinning in circles, then this is a waste of time. And time is most precious for startups. Every day matters!

Este es un componente que muchas no es tenido en cuenta y creo que es vital y es que tan capaces son de cumplir con lo propuesto en su plan de negocios y su idea inicial. Al final del día es de su capacidad actual y futura que todo se amarra.

A startup's execution capability is crucial. Assessing the team's experience, track record, and ability to meet milestones is essential. Operational expertise and resourcefulness often indicate their potential to turn their vision into reality.

Burn Rate and Runway: Assess the current burn rate and how long the startup can operate before needing additional funding. Financial Projections: Review financial forecasts and ensure they are realistic and based on sound assumptions. Valuation: Evaluate the current valuation and how it compares to industry benchmarks and the startup's stage.

You would be surprised how often this is overlooked and under-appreciated, yet it is VERY important! What is the number one killer of startups? —> Running out of cash. Properly account for cash: how much in bank, how much is burning per month, what is total FTE. Make sure to avoid over-hiring too early! I see this happen a lot, and it is rarely needed prior to finding Product Market Fit (PMF). Before PMF, be extremely frugal and focus on preserving cash to increase the amount of time available in pursuit of PMF. Also, be sure to report these to your investors every month. Provide clear KPIs of milestones and of the cash/runway financials.

To elevate an early seed stage company from MVP to Series A, mastering traction is paramount. Beyond MRR and user acquisition, securing mainstream media attention is crucial. Teaching founders to earn media coverage empowers them to sustainably outrank competitors and generate revenue irrespective of runway constraints. A founding team aligned with this strategy, coupled with a product catering to mainstream appeal, enhances effectiveness and ensures prolonged runway extension.

At the early stages there's so little other information that the quality of the founding team becomes the biggest determinant by far. The question is not so much whether the team will succeed in what they are setting out to do now, but rather is the team equipped to find something that works along the way and succeed at that.

prioritize your evaluation criteria by assessing the strength and experience of the founding team, the uniqueness and scalability of the business model, the size and growth potential of the target market, the startup's competitive advantage and differentiation, the feasibility of the technology or product, and the clarity of the go-to-market strategy. Additionally, consider the startup's financial health, including current funding, burn rate, and revenue projections, as well as the alignment of the startup's vision with your investment goals and values.

The most important thing, which you should look at, as an early stage investor is the founding team. The product may change, the business model will pivot and the market maybe a complete different, but the team stays the same and needs to be capable to navigate this maze. How did the team met, what is their expertise, do they bring the necessary key competencies and complement each other? How are they incentivized and how strong are they committed? Such and other questions should first and foremost be answered, before looking at the market opportunity, the product or other things. A strong team with a weak idea still outperforms a weak team with the best idea in the world, but no clue on how to execute it!