What are the top 3 non-financial attributes angels look for in startups?

Hi Karen,

At Sand Hill Angels, the top 11 non-financial attributes that we evaluate when reviewing a startup that is seeking funding are:

1. Trust - How well do we trust the principals? Can we work with them?

2. Team - How complete is the team? Proven CEO? Do they communicate well with each other? Are they enthusiastic or a little tired and defeated? Is the team composed of experts about their market, customers and technology? Is there a blend of big company and start-up experience in the team? Are references available on the team? Do references validate the quality of the team? Do we have references on the team from people that we know and trust? Do members of the team have a history of profitability? Is there a sense of perseverance, decency, competence, track record, and a burning desire to succeed?

3. Market Leader - Are they currently the leader of a segment? Huge market? Growing? Paying customers? Any customers a market leader? Intimate understanding of customer? Team track record with market? Alliances to form complete solution for customer? Sales/Marketing VP?

4. Products – Is the competitive advantage sustainable? Will this be an industry platform for other software, products and services? Paying customers? Referenceable? Significant unmet customer need?

5. Customers – Who will the customers be and why will they want to buy the product or service? Are there established customers willing to be beta-customers? Are customers looking for this start-up’s solution?

6. Barriers to entry - Are there barriers to entry by competition? Are those barriers sustainable? Does the company have new features that recognized competitors don’t have that result in significant barriers to competition?

7. Understandable - Is the new product or service something that investors can understand? Is it too complex to explain or understand the value proposition?

8. Time to Revenue and Share of Market - Is the time required for significant revenue quick or a long time away? Does market share come quickly or slowly?

9. Exit Strategy - What is the exit strategy? Is it clearly spelled out?

10. Something Special – What is special about the venture’s technology?

11. Risks – What are the most significant risks the venture may encounter? What is the strategy for managing & overcoming these risks?

All the best,

Jonathan