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Tim Jackson, Imperial College Business School, 30 April 2013

Tim Jackson, Imperial College Business School, 30 April 2013. 7. THE SEVEN QUESTIONS I ASK BEFORE MAKING AN ANGEL INVESTMENT. IS IT REALLY A STARTUP?. 1. DO THE FOUNDERS HAVE THE RIGHT STUFF?. 2. 3. WHAT TRACTION DOES THE COMPANY HAVE?. HOW BIG IS THE MARKET?. 4.

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Tim Jackson, Imperial College Business School, 30 April 2013

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  1. Tim Jackson, Imperial College Business School, 30 April 2013

  2. 7 THE SEVEN QUESTIONSI ASK BEFORE MAKING AN ANGEL INVESTMENT

  3. IS IT REALLY A STARTUP? 1

  4. DO THE FOUNDERS HAVE THE RIGHT STUFF? 2

  5. 3 WHAT TRACTION DOES THE COMPANY HAVE?

  6. HOW BIG IS THE MARKET? 4

  7. HOW MANY CUSTOMERS WILL YOU HAVE A YEAR?

  8. HOW MUCH WILL THEY SPEND EACH?

  9. AND HOW MANY TIMES?

  10. WHAT’S THE MARGIN?

  11. EBITDA:Customers x$ Transaction Value x Annual Frequency xMargin %

  12. LOG(EBITDA)= SCORE OUT OF 10$10B = 10$1B = 9$100M = 8$10M = 7$1M = 6

  13. HOW HIGH ARE THE BARRIERS? 5

  14. HOW MANY IMPOSSIBLE THINGS DO I HAVE TO BELIEVE? 6

  15. MVP EarlyvangelistsCore teamGrowth hypothesisPlausible revenue modelProven productBarriers erectedCompetitors overcomeProduct extendedExit likely in 1 year

  16. WHAT IS THE BUSINESS WORTH? 7

  17. Four variables

  18. www.leaninvestments.com

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