I came across this infographic and thought it good to share in the series of Investing Lessons From Venture Capitalists series. It is interesting because it initially highlights what a tech VC looks at when evaluating an investment so of course if you are starting a new tech company and are planning to raise money for that new tech company you need to understand all aspects of the infographic.
For the rest of us who aren't creating new tech companies and just happen to work at them or are friends and family of them... this is interesting as well for a number of reasons. If you are giving any feedback to a tech startup and don't have expertise or a strong opinion in one of the areas here - don't fake it and let the founders know you just don't know their business very well. If you aren't giving advice but are investing in any other public or non-public asset or security there are still some valuable things to take away here.
- Can you hold the investment for 5-7 years?
- Does the product they are selling make industry and micro-economic sense?
- Is it priced right and are the business managers taking too much out of the business?
- Is the company re-investing their profits in a good way?
- Are they actually executing on their plan?