Operators, you are our future and the fuel that New World Angels runs on. We appreciate you making the effort to earn our investment. Before submission, please be sure to review the Entrepreneurs Reference Guide and consider the below facts regarding what we are looking for in a portfolio company:
We typically invest in early-stage companies. This usually means the company has not raised capital from an institutional investor. Furthermore, the company is often raising money to minimize product and market development risks in advance of raising a more significant round of venture capital. Preferably the candidate company is already producing revenue or is forecasting revenues within two quarters. Ideally the company should be able to provide customer references that can be contacted by New World Angels.
Our criteria are not cast in stone, but the likelihood of a company receiving funding is greatly enhanced if it meets the following criteria:
1. Management. Experienced management must have a sound track record, or the clear understanding that the founding team accepts a transitory role. Management must demonstrate the ability to lead the organization, execute the business plan rapidly, manage cash effectively, attract additional financial and human capital, and adjust course when necessary. Founders of an early stage enterprise must be willing to accept hands-on involvement and support from the investors and the recruitment of more seasoned professional management if and when appropriate.
2. Business Plan. The business plan must effectively address all key aspects of the business, including management, technology, customer acquisition, and competitive challenges. Financial forecasts must be realistic with appropriate support for all key assumptions.
3. Compatible Co-Investors. Management, current shareholders, and potential co-investors must have experience in businesses of this type and stage. There must be compatibility among these parties and the shared commitment to work together to make the company a success.
4. Compelling Product, Technology, Service or Market Position. There must be a fundamentally exciting or disruptive technology, a unique service or approach to an attractive market, or other distinguishing characteristics.
5. Sustainable Differentiation. There must be a credible source of competitive advantage in the form of strong and defendable patents, proprietary processes, first-mover position, key customers under contract, or world-class technical talent.
6. Market Size and Growth Trajectory. The available market must be large and/or growing rapidly, typically in excess of several hundred million dollars or credibly expected to reach that size during the investment term.
7. Investment Structure and Terms. The investment structure and terms must afford us sufficient protection, influence and potential upside to justify our commitment of capital and time, and facilitate future capital-raising.
8. Exit Strategy. Management, current shareholders, and board must have realistic valuation expectations and compatible views on potential exit strategy.