First 3 questions to ask if invesing in a private business
Friday, February 22, 2008 | Russ Is this Spam?First 3 questions to ask if investing in a private business.
1. Who is the mgmt,their background and the end goal?(You are looking for relevant past expereinces, high integrity, action oriented people. End goal could be to build a business for ongoing operations, for immediate expected buyout by a larger player.)
2. How is the business idea "defendable" in the marketplace from competition and sensitivity to margin erosion?(Is this idea a modification of an xisting idea, a completly disruptive idea. Will the customers know what it is or need a high degree of education to understand, use or purchase. Is this sold through a channel, direct, both and what is the expected level of maintenance.)
3. What are the remaining barriers to entry with a timetable?(How far along are they with a prototype, inspectations, federal/state regulatory requirements)
Note there many more questions to follow...
Additionally you the investor, the more relevant the business idea is to your experience the better.
