Evaluating a venture for investment or partnership

Scenario: You've found a promising product/venture and now you want to join them as partner or investor or both.

Before making any investment or joining a venture, I prefer to evaluate
  1. Idea & team by analysing product performance within existing market.
  2. Market opportunity by analysing competitive landscape against user & stakeholder behaviours, business dynamics against regulation etc.
  3. Impact of product/service on entire ecosystem in long run.

Hence, I recommend you following guideline:
  • ask the written proof (like paid invoices/bank statements) of generated revenue. It will help you understand the current and future cash-flow requirements.
  • ask for the authentic customer/clients feedback. Better you should directly talk with their existing clients (if b2b) otherwise (if b2c) analyse their customer feedback metrics carefully.
  • anonymously buy their products and then lodge a complaint. Now analyse how they entertain you. This will help you to learn about their ability to forge a strong or weak consumer relationship. It's very important.
  • evaluate the product performance on the scale of demand vs supply, cost vs quality etc.
  • analyse business economics, tech, regulations, behavioural history of external stakeholders(like distributors, retailers, suppliers) and User.
The better homework you do, the lesser risk you will face.

Keywords: investment, funding, co-founding, co-starting, partnership

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