How to spot a good investment opportunity.
First, look at the community.
You can measure a start ups potential by gaging how their community feel about the brand or service. You want to be asking yourself:
Would consumers tell their friends about this? (referral rate)
Are they coming back again and again? (repeat rate, retention rate)
Are they spending money when they do? (conversion rate, basket size)
Do they ultimately have a good experience (online reviews).
Then, their team.
The founding team of a company plays a core part at any stage of investing, but especially in early stages! Consider a brands team, and ask think about:
Do the founders have the motivation, past experience or a first-hand understanding of the pain point they’re solving?
Do the founders complement each other and fill each others’ blind spots?
Are they commercial and can they sell their vision to new hires and future investors alike?