On this episode of The Full Ratchet Nick covers part 4a of Best Practices for Angel Investing including:
- Overview of Seed Investing
- Developing an Angel Investor Strategy
- Identifying startups: Deal-flow
- Evaluation & picking startups
- The Team
- The Product
- The Market
- Structuring the Deal
Welcome back for our fourth segment in best practices, called: “How to Win”… Evaluating and choosing startups to invest in.
This topic is broken into four items. On this episode we will cover the high-level considerations when evaluating startups and also the first category of the three-prongs of evaluation, which is “The Team.” On the next episode we will be addressing the remaining two items in Evaluation, including The Product and The Market.
It’s a bit of a lengthier episode than normal as I will be covering two sets of ten best practices… but bear w/ me as the content on Evaluation, while involved, is maybe the most critical element. No matter what an investor does, if they choose startups poorly, nothing else matters.
The first, high-level category on evaluation, has ten items. They are:
Overview of Evaluation
- Jockeys, Horses & Racetracks
- The Pitch
- The Exit
- Burn Rates
Now that we have addressed the high-level evaluation items, we will move on to the three major sub-components, starting with the “Team” ie. The Founders. This sub-section also includes 10 items:
The Team / The Founders – “The Jockey”
- “The Sell”
- Emotional IQ
- Past Behavior
- Product-Founder Fit