Memo for seed investors
When investing at the seed stage, failure can be forgiven. But an ineffective decision making scheme when investing is unforgivable. In my Upside Partnership, so as not to miss any aspects when concluding transactions, I check the list of control questions when making a decision.
To make a positive decision on the project, it is not necessary to answer all the questions in a positive way. But all questions must be asked. Thus, we identify potential risks in advance and recognize all the “blind spots” of the decision. We deliberately do not adhere to the boring list of indicators that the company will have to achieve in order to collect a round of investment. We have developed a tool combining both a creative and rational approach.
I recently shared my document with several people seeking to make investment the main focus of their activities, so I decided to post it here. This list of questions is neither perfect nor exhaustive. But he helped me with the development of the Upside Partnership. If you want to become an investor or learn how to understand how a seed investor makes decisions about investing money, read the points below and share your opinion.
Market
☐ What is the market?
☐ What changes in the market led to this opportunity?
☐ What will not change in the market and will impede the realization of this opportunity?
Product
☐ What is a product?
☐ Is the product the first of its kind? Is it any different from those on the market?
☐ How will the product reduce the number of factors preventing the conclusion of a transaction?
☐ Customer information
Team
☐ How well does the team fit the task?
☐ What are their gaps?
☐ Who are the key employees?
☐ Are they able to attract the right people?
☐ What unique knowledge can they offer to other members of the Upside Partnership?
☐ Information about the founder of
Risks
☐ What are the known risks?
☐ What are the key risks?
☐ What can reduce these risks?
☐ How can losses be minimized?
☐ Investment risk versus principal risks of the project
Upside Partnership questions
☐ What can convince you that the company will become one of the 10 most influential in the sector?
☐ What do we not know?
☐ What is the RTFE indicator (the sum of the exit value justifying the conclusion of the transaction)?
Follow-up questions
☐ What is now known about factors that you did not know about when you first invested?
☐ If you then knew what is now known, would you still invest in the project?
☐ Why?
☐ Are you biased due to commitments already made?
Original: A Seed Fund's Investment Checklist
To make a positive decision on the project, it is not necessary to answer all the questions in a positive way. But all questions must be asked. Thus, we identify potential risks in advance and recognize all the “blind spots” of the decision. We deliberately do not adhere to the boring list of indicators that the company will have to achieve in order to collect a round of investment. We have developed a tool combining both a creative and rational approach.
To make a positive decision on the project, it is not necessary to answer all the questions in a positive way. But all questions must be asked.
I recently shared my document with several people seeking to make investment the main focus of their activities, so I decided to post it here. This list of questions is neither perfect nor exhaustive. But he helped me with the development of the Upside Partnership. If you want to become an investor or learn how to understand how a seed investor makes decisions about investing money, read the points below and share your opinion.
List of issues when making an investment decision
Market
☐ What is the market?
☐ What changes in the market led to this opportunity?
☐ What will not change in the market and will impede the realization of this opportunity?
Product
☐ What is a product?
☐ Is the product the first of its kind? Is it any different from those on the market?
☐ How will the product reduce the number of factors preventing the conclusion of a transaction?
☐ Customer information
Team
☐ How well does the team fit the task?
☐ What are their gaps?
☐ Who are the key employees?
☐ Are they able to attract the right people?
☐ What unique knowledge can they offer to other members of the Upside Partnership?
☐ Information about the founder of
Risks
☐ What are the known risks?
☐ What are the key risks?
☐ What can reduce these risks?
☐ How can losses be minimized?
☐ Investment risk versus principal risks of the project
Upside Partnership questions
☐ What can convince you that the company will become one of the 10 most influential in the sector?
☐ What do we not know?
☐ What is the RTFE indicator (the sum of the exit value justifying the conclusion of the transaction)?
Follow-up questions
☐ What is now known about factors that you did not know about when you first invested?
☐ If you then knew what is now known, would you still invest in the project?
☐ Why?
☐ Are you biased due to commitments already made?
Original: A Seed Fund's Investment Checklist