How to Invest in Startups: Monitor for Progress Before Investing

Investing

On first blush, all investment opportunities look attractive.  As the investigation progresses, the warts, blemishes, and challenges become clear.

It’s important to monitor deals for a few months before investing as it takes at least three months to surface all the relevant details about the deal.

It’s also important to assess the capability of the team. Steady progress with revenue, product development, and team deployment need to be measured.

In the TEN Capital program we monitor the deals and give updates about their progress. We rely on the startups to provide updates in the form of a campaign.

The way the startup runs the campaign is a good proxy for how they will run the business.

Some come in and build out their documents expeditiously. They follow up with the investors in a timely manner and they are able to close an investment using strong communication skills.

Others come in and have difficulty building out their pitch deck. They get distracted with other things in life and can’t follow up in a timely manner.  Some have a hard time closing investors because their business is vague and the goal is fuzzy.  This type of campaign indicates a weak team and makes for a questionable investment.

It’s interesting to watch their investor relations campaign because it’s a good indicator of how they will run their sales campaign.

Read More: How to Invest in Startups: How to use Analytical Tools for Startup Investing


Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies.

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