Successful Startup Investing CriteriaThe criteria we found for successful startup investing are:
- There are two or more industry-experienced C-level leaders
- The company has a strong competitive advantage.
- The company is solving a hard problem.
Competitive AdvantageA competitive advantage is more than just a fistful of patents. It’s an advantage that either increases the company’s revenue by 30% over that of the competition or decreases their cost by 30%. A hard problem is a problem that customers will pay for it, and it is non-trivial. The key here is you need both. Many universities are solving hard problems, but there’s no competitive advantage in the sense the market will pay a premium. There are also “execution plays” where a company is out-executing the competition, but without solving a hard problem, it won’t last long. You can read more in the TEN Capital eGuide: How to Invest in a Startup
Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: email@example.com