Evaluating Start-Ups For Investing

Steps to evaluate: part ii from the guided series for investors who are keen to fund start-ups and participate in the booming industry.

- Thenmozhi Shanmugam

We have spoken about why we think the state of Kerala is primed to be ready to become more inclusive and engaging ecosystem. When you are investing at a very early stage with a tiny traction for a promising founding team, get used to asking plenty of “WHYs”. When you are investing in a start-up for the first time, or 10th or 100th time, a general rule of thumb to consider comes down to a handful of critical factors which leads to creating real value in the operating environment versus hyped PR mentions.

At fundcloud, we always begin with an initial meeting with the founding team to discuss the following key factors:

ENTREPRENEURS FIRST: The founding team (individuals who have come together to ship an awesome product on time, with awesome features and delightful user experience) will define whether it is possible to deliver in building a successful business. Understanding how passionate they are as founders, about the problem they are solving, is key. Will the founders learn quickly? Execute fast? Will they continuously keep improving their capabilities to deliver a great product? These are factors that are telling signs whether the team has what it takes to build a good, profitable business. This requires a steep learning curve and lot of process-thinking to get it right.