HOW INVESTABLE ARE YOU?
DON'T SCARE YOUR INVESTORS AWAY!
Are you a startup founder seeking angel or VC funding? If so, you likely know that securing funding is not easy. In fact, less than 1% of startups secure the financing they seek. To help you increase your odds, I've developed an investability test, consisting of 9 points that you must nail if you want to convince your investors to bet on your startup.
This tool provides the framework that venture capitalists use to evaluate potential investments, offering practical recommendations and insights on what to do and what to avoid to enhance your startup’s appeal to investors. Before approaching your investors, make sure you have done the groundwork to leave them no option but to invest in your startup.
COMPETITION
'We have no competition'
Easily replicable product
Low barriers to entry
Overlooked competitive threats
MARKET
Small number of interviews
Limited market research
Unrealistic TAM, SAM, SOM
Top-down market estimates
SOLUTION
Small & unimportant problem
Fails to solve the problem
Unintuitive UX/UI
Lacks scalability
BUSINESS MODEL
Unclear value proposition
Unpredictable revenues
Low retention / high churn
Short contracts (B2B)
EFFICIENCY
High cash burn rate
Short cash runway
No budget control
Excessive staff
TEAM
No relevant experience
Poor leadership skills
Lack of commitment
Incomplete team
GO-TO-MARKET
Single GTM strategy
Long CAC payback periods
Optimistic projections
Unclear timeline
MARKET FIT
Full MVP before testing
No feedback channels
Unfunded pricing strategy
Slow to implement changes
FOCUS
Targeting many markets
Targeting unrelated markets
Taking shorcuts
Rushing projects
COMPETITION
Realistic judgment of competitors
Credible assessment of risk
Proprietary tech & patents
High barriers to entry
MARKET
Thorough market research
Tested with potential users
Positive market feedback
Evidence of past pivots
SOLUTION
Solution is a "must-have"
Solves painful problems
High scalability
Value proposition validated
BUSINESS MODEL
Good metrics (LTV:CAC, margins)
Strong Unique Selling Proposition
Maximum of 3 revenue streams
Well-thought pricing strategy
EFFICIENCY
Low cash burn rate
High cash runway
Strong budget control
Adequately staffed
TEAM
Previous exists / accomplishments
Significant past positions
Complementary skillsets
Proven to attract top talent
GO-TO-MARKET
Diversified channels
High K-factor & Low CAC
Clear milestones
A robust waitlist
MARKET FIT
Easy feedback forms
Engaging with users
Building a community
Proven rapid iteration
FOCUS
Sharp focus on low-hanging fruit
Well-chosen North Star metric
Effective prioritization of goals
Consistent monitoring
