Creating a High Value Business

Creating a high value business is about much more than creating a unique product, or service, or acquiring a good reputation in the market. Here is what investors look for in a startup: The most important factor is the quality of the team. Next come the size of the opportunity, the competitive landscape and your position in it, and the financials (amount of funding, and exit strategy). Finally investors look for the stage the business is in: paper, prototype, beta customer and so on.

As far as the team is concerned investors look at the individual experience of the founders as well as how well they complement each other. The CEO being unwilling to step down in the future, or being un-coachable is a deal breaker. The market being addressed and the potential revenues should both be reasonably large. The business should be expected to achieve revenues of at least $10 million in 5 years. In terms of competitive landscape investors look for some unique advantage enjoyed by the firm like a patent or copyright, and the strength of existing competition. The total money amount of money to be raised is also key as was explained in a previous post. Finally the valuation of a company rises the closer it gets to having a real customer.

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