What do Investors Look for in a Successful Startup?
Article by Mark Peter Davis
SeedInvest, a New York-based equity crowdfunding platform,�sat down with Mark Peter Davis, Managing Partner at�Interplay Ventures,�to discuss investing best practices, recommended startup due diligence, and common startup investing nuances.
Here are the key takeaways from the discussion:
Should you invest in a startup with a�huge market, an�incredible team, or�phenomenal technology?
- The key is to invest in a company that has some degree of each
- �We�re trying to check all of the boxes at the sufficient level�
- You should never sacrifice two of the three for just one strong area
What do investors look for when searching for successful startups?
- Pinpoint the company�s core function
- Analyze whether or not the core team/CEO can efficiently execute that core function
- Organized and emotionally intelligent entrepreneurs
�Wait for the one where you can�t believe you�re going to get in�that�s when you should invest�
Do you have any startup investing advice?
- Don�t be too quick to rush into a deal
- Don�t be afraid to pass on a company that isn�t fully there
- There are always similar companies to examine
Are there any nuances to startup investing?
- If a company is targeting a narrow customer base, things can go wrong quickly
- Always look for momentum in product development and �be able to see milestones of progress made over time�
- Look out for possible friction between startup founders
- While there are some common nuances, there are just as many unique ones