Investible Companies
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There are many paths to building a sustainable business. Below are some questions and topics for entrepreneurs thinking about soliciting investors in their company, and for investors thinking about investing in a company.
Groundwork
- What is the company’s vision?
- What is the company going to sell, a service or a product?
- What is the company's strategy for generating revenue?
- What markets will it compete in?
- What does the company's competition look like?
- Is the company's market new, or is it saturated with similar services/products?
- Is the company offering something different to the marketplace?
- What are the company's strengths, weaknesses, opportunities, and threats?
- How realistic is the company's vision?
- Has the company received any feedback or consultation on the feasibility of delivering the product or service?
- What costs are involved in providing the product or service?
- Are there barriers to entry, such as licenses, patents, or high capital costs?
- How does the company plan to overcome any barriers?
- Has the company conducted sufficient market research?
- What is the company's marketing and distribution plan?
- Is there a written plan of operation?
- What milestone goals does the company have planned?
- Does the company have an initial proof of concept or product prototype?
- How soon does the company want to launch its product or service?
- What capital source will be needed to achieve these milestones?
Company Structure
- What type of business entity is the company?
- In what jurisdiction did the company organize the business?
- Has the company prepared its organizational documents, obtained federal and state tax identification numbers, and applied for any required registrations or licenses?
- What liability does the legal structure of the company pose to directors, managing members, and shareholders?
- Will there be a physical location for the business entity's headquarters?
- If the business is online, is there any risk the company could lose the online platform or not have control over changes to the platform?
- Does the company have internal infrastructure resources for:
- Record keeping?
- Human resources?
- Payment distribution?
- Expense reporting and accounting?
- Regulatory compliance?
Management Team Experience and Dynamics
- Who are the founders and what skills or experience do they offer the company?
- Who are the members of the management team?
- Do the management personnel have relevant backgrounds, education, and experience?
- Does the company have a compliance officer?
- Does the company conduct calendared and recurring events:
- Board of Director meetings?
- Shareholder meetings?
- Review and amendment of the business plan?
- Planned meetings with consultants, attorneys, accountants, or business mentors?
- Does the company have an advisory team?
- How many qualified employees will the company need to achieve the vision?
- How will the company compensate its employees and independent contractors?
- How will the company minimize employee turnover?
Asset Protection and Operation
- What are the company's assets, including intellectual property, patents, licenses, trademarks, contractual agreements, cash, investments, office space, vehicles, furniture, and computers?
- Are the assets titled in the name of the business entity?
- Are the intangible assets registered for copyright, patent, or trademark protection?
- Does the company have a strategic partnership for:
- Labor and talent recruitment?
- Supply chain and inventory management?
- Banking and company accounts?
- Marketing, advertising, and communication?
- How does the company plan to secure and protect corporate assets?
- Does the company have adequate internal controls that protect the company's ownership and board of director voting?
- Is the company properly insured?
- Does the company have security and protection from theft?
- Does the company have litigation threats or pending claims?
- Who in the company has access to critical or strategic assets?
Capital Structure
- How has the company been paying its bills so far?
- When will the company begin auditing its financial statements, and how much will it cost?
- What are the company's financial statement disclosure schedules?
- Has the company projected its future capital needs and sources?
- What stage of growth is the company in?
- What are the company's current and projected sources of working capital?
- What is the breakdown of the company's capital financing and equity ownership?
- What percentage of the company's equity will be allocated for founders, employee stock options, retirement plans, and outside investors?
- Has the company inquired about non-investor sources of capital?
- How will the company's debt be repaid?
- What are the company's future operational needs?
- What are the future technological and infrastructure needs of the company?
- How will the proceeds from the capital raise be used?