1 min read The Importance of Monitoring Startup Deals
Startup investors need to monitor the candidate’s startup to understand the company better and see consistent progress.
As an angel investor, I hear pitches every day. It’s been a while since I heard a software pitch that WASN’T going to market in two months. Everyone is “going to market in two months,” but the reality is that most take one to two years to get traction in a market.
Plan of Action
When I find an attractive potential investment, I put it on my watch list. My father was a buy-and-hold value investor in publicly traded stocks. He had a watch list of 10 stocks that he checked every month. He would look up their earnings, check for any management team changes, see what new products they were offering, and then look at the price. After some time, it could be a few months or a few years., he would decide whether to invest. A no meant he took it off his watch list. A yes meant he invested money and put it in his portfolio.
Plan Execution
Startups are pretty much the same. You can track them on their sales growth, team changes, product development, and in their fundraise. As you receive reports, you can build out a list of crucial traction points– leads, sales, channels, etc. As one investor said, “I don’t invest in dots. I invest in lines.” Building out a picture of how the business is growing is essential.
By watching the deal, you can better understand it and hopefully see an upward trajectory, at which point an investment makes sense.
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Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group
