You have been invited to an investment forum or to the launch of a new investment round and you decide to go to learn about projects in which to potentially invest, to network with other business angels or simply to learn more about this world. Since you are going, why not make the most of your time and leave the event with a good idea of whether or not the companies you have seen can fit into your portfolio?

The problem and the solution

Has the company clearly explained the problem it has identified in your industry? Does your solution provide value and meet market needs? Is it a sustainable solution in the long term? You should also ask yourself if this solution improves on existing alternatives already established in the market. In addition, at some point in the presentation, the company should talk about its competitors and their advantages over them.

The management team

Would you say the management team is motivated to turn their company into the next unicorn? Look at the background of the team, what they did before will give them more or less credibility and ability to take the business to the next level. For example, find out if they have already set up other startups in the industry and how they did. Or if the company is in search of funding, public, private... find out what happens with the founders, have they Invested in their own project?

Market opportunity

When entrepreneurs talk about their target market they often use dazzling figures to refer to the world market or the market of the country they plan to sell their product or service to. It is good to know the limit of your market, but what you really need to know is what your real market will be in the short term and how you plan to reach it. Market penetration will not be the same if it is a virgin market, where the company's solution is the first one that exists for that market, or if it is a market that is already educated and knows the different alternatives.

Use of funds

How will the funds being raised be used, and do you think they will use them wisely and with the goal of bringing their product to market? Depending on the stage they are in they may need to increase their sales team or invest in infrastructure to grow a particular division of the company that will drive their growth after the investment, for example. Understanding how the investment will be used will help you better analyze where the company really wants to go.

Investment exit

Has the company managed to convince you of how you could recover your money? Did the multiplier and the exit date of the investment seem reasonable to you? Apart from a potential sale to a larger company or a competitor, are there other alternatives to recoup your investment? There are many reasons why professional investors invest, but there is one reason they all agree on: to receive a substantial return on their initial investment.