Investable Companies #2: Is Your Startup Investable?

Investable Company

Investable companies don’t occur by accident. In fact, the opposite may be true; many companies may accidentally become un-investable. This article is part #2 of a two part series that shares tips as to why startups may be investable enabling them to obtain funding from angel groups and VCs.

Your company might be investable if…

  • The company is open to providing information and observer rights or a board seat for appropriate levels of investment.
  • You focus on listening to and understanding your customer and their needs.
  • Your startup has no significant debt, (beyond Convertible Notes), unpaid accrued or contingent liabilities.
  • The startup has a clean “Cap Table” and is without unaccredited investors or complex shareholder issues.
  • The startup has no shareholders with non-dilution clauses.
  • The valuation of the previous round of financing was reasonable and this round’s valuation is balanced.

Potential Due Diligence Showstoppers:  Do Any Apply to Your Startup? 

  • The founders and inventors have embedded the IP in the startup.
  • There are no significant lawsuits pending against your startup.
  • Neither you nor your startup co-founder possesses a history of litigation against third parties.

Is Your Startup Investable? Take the Test and  Find Out Now!

  • The addressable, attainable market for the startup’s products or services is reasonably significant, approaching $100M as a minimum.
  • Your startup focuses on listening to and understanding your customer and their needs.
  • The startup has a reasonable operating runway, is not running on fumes.

See how other entrepreneurs negotiate the startup effort! Business Startup Spotlight

  • The filing of tax returns and adherence to state and federal regulatory issues can be validated.
  • There are no pre-existing agreements which might cloud an exit.
  • New investors can become comfortable they won’t be subject to significant dilution because excess capital will be required in the future.
  • The existing investors possess cash flow and are willing to provide a follow-on investment in the upcoming round.
  • You and your co-founders view this opportunity as the first of many startup opportunities.

Want your startup to become an investable company? TurboFunder Concept Stage is FREE and Can Help!

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Tony Lettich

Tony Lettich has previous corporate venture capital experience and currently serves as Managing Director of The Angel Roundtable. He is a co-founder of FundingSage, which provides valuable information, tools and resources to entrepreneurs seeking to start, grow and fund a business.