Appel also says market size is important.<\/p>\n
\u00a0<\/p>\n
\u201cOutlining the size of the market the entrepreneurs are targeting and whether they have a vision for local or global growth will help investors understand the size of the opportunity in front of them,\u201d he says.<\/p>\n
\u00a0<\/p>\n
Traction<\/b><\/p>\n
\u00a0<\/p>\n
Is the business already making sales?<\/p>\n
\u00a0<\/p>\n
Chong says investors want to know if the company is already taking cash from customers.<\/p>\n
\u00a0<\/p>\n
\u201cThe more cash you\u2019ve taken from customers the more validation you\u2019ve received. They\u2019ll want to know how you\u2019ll keep making sales and the channels of those sales,\u201d he says.<\/p>\n
\u00a0<\/p>\n
Appel says whether the business\u2019s product is in research and development or has been commercialised will determine what stage it\u2019s at.<\/p>\n
\u00a0<\/p>\n
\u201cBased on the stage, outline the key metrics which will vary for each business demonstrating traction achieved and how sustainable the model is,\u201d he says.<\/p>\n
\u00a0<\/p>\n
Traction could also incorporate elements of the company\u2019s business model.<\/p>\n
\u00a0<\/p>\n
\u201cWe need to be able to see that the product or service can be delivered into the market at good margins and at volumes that drive a profitable business,\u201d Birkill says.<\/p>\n
\u00a0<\/p>\n
\u201cToo often we see businesses with good traction in their target market that have little prospect of making a profit because (for instance) they don\u2019t understand how to cost their overheads into their pricing model.\u201d<\/p>\n
\u00a0<\/p>\n
Team<\/b><\/p>\n
\u00a0<\/p>\n
Who will deliver the business? Who are the management team and what\u2019s their track record? Appel says it\u2019s important to outline to investors who the team is that\u2019s building and running the business and why they\u2019ll succeed.<\/p>\n
\u00a0<\/p>\n
\u201cWe are investing in the entrepreneur\u2019s vision, passion and their ability to execute, which combined, are critical elements in our assessment process,\u201d he says.<\/p>\n
\u00a0<\/p>\n
Birkill says that assuming a business\u2019s market opportunity is real and the technology solution is solid, team is most important consideration.<\/p>\n
\u00a0<\/p>\n
\u201cWe need to feel we really \u2018gel\u2019 with the key managers,\u201d she says. \u201cDoes the team have the right skills and experience to deliver the business? Are they passionate and motivated? Can we work together over the next two to five years in a collaborative fashion?\u201d<\/p>\n
\u00a0<\/p>\n
Chong asks how team members will help a business get to its destination.<\/p>\n
\u00a0<\/p>\n
\u201cI like teams with technical and business backgrounds,\u201d he says. \u201cI also like teams where there\u2019s someone who has domain knowledge expertise \u2013 they either know the industry or have experienced the problem first hand.\u201d<\/p>\n
\u00a0<\/p>\n
Financials<\/b><\/p>\n
\u00a0<\/p>\n
Birkill says these should be \u201ctop level\u201d in terms of detail and include key assumptions around things such as market penetration, pricing and staffing.<\/p>\n
\u00a0<\/p>\n
She says this section will also include how much money the company is seeking to raise.<\/p>\n
\u00a0<\/p>\n
Appel says it\u2019s important to understand where the funds raised are going to be spent.<\/p>\n
\u00a0<\/p>\n
\u201cIs it growth capital, in which case the funds will be spent on product development and international expansion,\u201d he says. \u201cOr is it to be focused on marketing to build awareness for customer acquisition? The answer to this will depend on the stage the business is currently at.\u201d<\/p>\n
\u00a0<\/p>\n
Chong says there should be \u201ca clear ask\u201d.<\/p>\n
\u00a0<\/p>\n
\u201cInvestors want to know how much money you want and what you\u2019ll use it for,\u201d he says.<\/p>\n","protected":false},"excerpt":{"rendered":"
Appel also says market size is important. \u00a0 \u201cOutlining the size of the market the entrepreneurs are targeting and whether<\/p>\n","protected":false},"author":2,"featured_media":62557,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/32654"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=32654"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/32654\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/62557"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=32654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=32654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=32654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}