There never seems to be a shortage of people wanting you to invest in their brilliant idea that is going to take the world by storm. So what do I look for in an investment opportunity?
Just to be clear, I’m not going to invest in a business where the money goes to paying off loans, scooped of the table by founders or pays off some other obligation. The purpose of investment money is to GROW the business so that it is successful…..not clean up messes.
When I invest in a venture, I’m actually investing in a person so I really listen to not just the content of the pitch but whether the person giving it really understands the value proposition. If they can’t articulate the value proposition in about 1 minute, then I become completely disinterested. I’m not deliberately being rude; I just don’t have the time for someone that hasn’t clearly thought about it themselves. It may be a good idea but a potential founder who hasn’t thought about why it is of benefit to customers is not investable.
The second thing I look for is the background of the founder and how they came up with the awesome idea. I’m wanting to hear passion in the voice and why they are going to put everything on the line to get the business up and going. Entrepreneurs tend to have a succeed at any cost mentality that allows them to push through or around any obstacles in their path. If that attitude isn’t there, then you’ve lost me....