Everyone has their own set of biases and requirements when it
comes to evaluating business opportunities.
I have mine and often state them publically when meeting with companies
I am considering a future interaction. My
criteria for engagement are the same whether my participation is as an
investor, Director, advisor, or operating member. I believe that everyone uses the same
criteria. People may state them or
weight them differently, but all diligence and evaluative processes examine the
company relative to these 3 key characteristics; 1) exciting technology, 2) great
people, and 3) potential for future payoff. All of my evaluative processes follow these 3
characteristics in this exact order.
Future employees, investors, or potential business partners may
describe my factors in different terms.
They all will have some means of evaluating you and your company
relative to them. The better you can
relate your business to the traits, the better the odds they may decide to
interact with your company.
Technology
I have reached a stage of loving technology and finding excitement
in new and novel inventions. It is
exciting to review a technology and learn a new field. The technology must be original and novel and
never copycat or me too. I must see plans
toward monetizing the technology and converting products into a sustainable
business. I also love to see products
that improve people’s lives in some unique way.
With this bias, my common statement is my first priority is “I have to LOVE the technology.”
People
I often joke that my resume states I will not work with NASTY personalities. Actually, I say that in a more vulgar manner,
but you get the message. Working with
people on a day-to-day basis and having close contact with frequent idea
exchanges or instructions can be stressful.
Working with individuals that will not listen or behave like jerks reduces
the enjoyment factor of working with a great technology. Why waste my time working with people that
are incompetent, opinionated, obnoxious, and/or will not listen? My stated
objective is very clear with every company; “This
Company must be successful and I will do everything I can to help.”
Payoff
This brings me to the final factor that is the last on my list,
but it may be first on many others’ lists.
I expect to see a payday some place down the road. I do not mean a paycheck, but a real big
payday. Working with early stage
companies usually means working for some period at RISK; this means not getting
a paycheck. The reward must be worth the
effort and include compensating me for the risk component plus the lost income
component. I expect to have an ultimate reward
being a large appreciation in my equity coupled with a liquidity event that takes
place in my lifetime! After all, “I am not in this business for religious
reasons.”
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