My personal checklist for Startups

In preparation of my jury membership at http://www.startupdays.ro/ I was asked to elaborate a little on what it is I’m looking at when talking to startups. Of course, this is purely my personal checklist, but most of these questions are widely accepted as a barometer of getting into the VC game.

So here it goes:

Management
Is your management team experienced, motivated and willing to give in some control to outside investors?


Market
Do you have an identifiable market segment?
Is there a demonstrable and significant demand for your proposed product/solution?
Does your product have any growth potential? How do you see that potential evolving over time?
How will you "educate" or "initiate" your market?


Competition
Who are your potential/existing competitors?
What are your product's key differentiation factors?


Technology
Have you established a Proof of Concept with regards to your product and/or technology?
Is this measureable or confirmed by leading experts? Did you do your research?


Intellectual Property
Are there any steps undertaken to protect the intellectual property of your idea(s)?


Marketing & Sales
How will you achieve widespread market penetration for your product?
What will be your strategy with regards to the use of New Media?


Profit Potential
Can you demonstrate how sufficient margins and consistent cash flow will be achieved?
If yes, in what time frame?


Capital needs
Do you require funds to finance growth activities, including product development, recruiting key staff consulting, launching sales and marketing activity?
What is your auto-financing capability?


Financials
Do you have established reasonable financial projections - including an income statement, cash flow and balance sheet and supporting spreadsheets - based on logical, realistic assumptions?


Exit Strategy
Do you have a clear exit strategy that will enable angel investors or VC’s to generate a return of at least ten times their initial investment within five to seven years?