At any given time here are thousands of new ventures and startups. Many have high energy officers and exciting new ideas. It can be difficult to separate out those with more likelihood of success.
Early Stage Startup Desired Characteristics
When you see an early stage startup with characteristics such as those listed below, they are more likely to be successful:
- The most important characteristic is the team
- Founders who have previously brought products to market in their chosen target market
- A CEO who has previously managed managers or been in the field as a manager in sales or business development or investment banking
- Other important characteristics
- Have a believable, real unfair advantage; one where they can keep one year ahead of competitors for 2-5 years
- Combined with the unfair advantage, the startup effectively has significant barriers to competitive entry into their space
- Plans an initial launch that is B2B (B2C launches are more expensive). If a startup plans that its first launch will be a B2C launch; then from the time of corporate formation it should have a plan for how a useful B2C launch will be financed.
- Has a balanced multidisciplinary team; i.e. includes marketing, business (not just a tech guy with a business course), and not too many technical people. You do not want the technical guys to outnumber the marketing and business guys when they vote (or vice versa).
- Has a strategy which is consistent with the core assets of the team and which can be supported by the ecosystem.
Conclusion
Look at the executive team. Investors are more likely to invest in a new venture that has experienced executives.
John Gale’s White Paper on Business Plans is Available for Download
You may be interested in John Gale’s White Paper, Startup Presentations to Angel/Seed Stage Investors and Partners: Recommendations for Best Practices This White Paper can be downloaded from:
- The Business Plans page on this Website
- It can also be downloaded from this page on the Angel Capital Association website. The Angel Capital Association is the leading professional and trade association supporting the success of (US) angel investors in high-growth, early-stage ventures
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