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Evaluating Business Opportunities: The Deal Scorecard

This comprehensive guide covers key aspects for evaluating business opportunities, from management and market analysis to competition, product/technology assessment, forecasting results, and capital intensity considerations. Featuring real-world feedback and a Q&A section, learn how to identify and assess potential ventures effectively.

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Evaluating Business Opportunities: The Deal Scorecard

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  1. Evaluating Business Opportunities Jamie Goldstein nbvp.com

  2. Evaluating Business Opportunities • The Deal Scorecard • Real World Feedback • Q&A

  3. The Deal Scorecard 1 10 1. Management 2. Market 3. Competition 4. Product/Technology 5. Ability to Forecast Results 6. Capital Intensity

  4. Management 10 1 Senior Team Proven Record No Operating Experience • Good Teams have: • Done their jobs before (no OJT) • Experienced ramp from startup to big company • Relevant industry experience & contacts • Specialized expertise and insight • Ability to adapt to change • Brains and hunger • Example: SilverStream

  5. Management • A Good Incomplete Team • Vision • Energy and hunger • Efficient • Wants to be the best and hire the best • Appropriate role for each person • Acknowledges management gaps • Values muscle building over time • Example: HighWired.Net

  6. Market 10 1 > $1 Billion CAGR > 30% Stagnant • Attractive Markets: • Big • Adopt new products quickly • Customers that feel real pain • Customers that can be reached economically • The time is (will be) right • Example: Centra

  7. Competition 10 1 Potential for Leadership Several Established Players • Leading Companies: • Typically first to market • Leaders define “Market” • Leaders get market share • Market share critical to success • Example: MyTeam.com, B2B marketplaces

  8. Product/Technology 10 1 Clearly Superior Providing Leverage No Advantage • Leading Products: • Difficult to replicate • Special technical skills required • Special domain knowledge required • Proprietary technology (patents) • Many man*months (time, $) • Improve rapidly with customer feedback • Example: Phase Forward

  9. Ability to Forecast Results 10 1 High Low • Great companies create and execute operating plans: • Plan is financial expression of strategy • Defines business model • Shows interrelation of timelines, functions, hires • Reflects detailed understand of the business • Example: 2nd Century Communications

  10. Capital Intensity 10 1 Low High • A function of: • Capital expenditure needs • Working capital needs • Gross margins • Sales and marketing expenses • Example: SmarterKids.com

  11. No Single Recipe A B C 1 10 1. Management 2. Market 3. Competition 4. Product/Technology 5. Ability to Forecast Results 6. Capital Intensity

  12. Real World Feedback • Friends and family • Interviews with: • Customers, Analysts, Potential hires, • Potential partners, Other CEOs • Where is the pain? • Would you buy? • How many? • How do you buy? • What could we do better? • Listen, Listen, Listen • Example: Rajmataj

  13. Q&A

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