Posted by 2013-11-18 18:13:51
Title: What are the 3 top things investors look at in the first 2 years of a start up business?...
Different classes of investors have different perspectives, but let me share the framework that I use in my venture platform (NFQ Ventures). Note that as an early stage "micro-VC", we have a slightly different perspective from prototypical Angels or later stage institutional venture capital funds (for more, see blog post on "Parsing the Venture landscape").
So, what do I look for when I am considering an investment?
As a venture investor, I want to know that the founder and the business can drive a +10x return on my investment, and that NFQ can materially help to achieve a vision of global thought and market-share leadership. Because we work very closely with any founder that we back, we look for chemistry, trust, candor and an absolute commitment to winning and to having each other's backs. Simply put, once we close the financing, we instantly convert from being investors into being business partners with our founders. Right away, that should tell you that venture financing is not for every business, and taking on venture money with a business that is ill suited for it can turn out to be a very painful affair for all involved - but that is a topic for another post :-).
Here's a couple of things that we look for, when considering taking a position in an investee company: