Memo for seed investors

When investing at the seed stage, failure can be forgiven. But an inefficient decision-making scheme for investing is unforgivable. In my Upside Partnership, in order not to miss any aspects in concluding transactions, I check the list of control questions when making a decision.

To make a positive decision on the project, it is not necessary to answer all questions positively. But all questions must be asked. Thus, we identify potential risks in advance and are aware of all the “blind spots” of the decision made. We deliberately do not adhere to a boring list of indicators that the company will have to achieve in order to collect a round of investments. We have developed a tool combining both creative and rational approach.

To make a positive decision on the project, it is not necessary to answer all questions positively. But all questions must be asked.

I recently shared my document with several people seeking to make investments the main focus of their activities, so I decided to post it here. This list of questions is neither perfect nor exhaustive. But he helped me during the development of the Upside Partnership. If you want to become an investor or learn to understand how a sowing investor makes decisions about investing money, read the following points and share your opinion.

A list of questions when making an investment decision

Market
☐ What is the market?
☐ What changes in the market have led to this opportunity?
☐ What the market will not change and will impede the realization of this opportunity?
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Product
☐ What is a product?
☐ Product first of its kind? Is it any different from the ones on the market?
☐ How will the product reduce the number of barriers to a deal?
☐ Customer Information

Team
☐ How fit is the team to the tasks?
☐ What are their gaps?
☐ Who are the key employees?
☐ Are they able to attract the right people?
☐ What unique knowledge can they offer to other members of the Upside Partnership?
☐ Founder Information

Risks
What are the known risks?
What are the key risks?
☐ What can reduce these risks?
☐ How can you minimize losses?
☐ The risk of investment compared with the principal risks of the project

Upside Partnership Questions
☐ What can convince you that the company will become one of the 10 most influential in the sector?
☐ What don't we know?
☐ What is the RTFE (output value amount justifying the deal)?

Follow up questions
☐ What is now known about factors that you did not know about when you first invested?
☐ If you then knew what is known now, would you still invest money in the project?
☐ Why?
☐ Are you biased due to commitments already made?

Original: A Seed Fund's Investment Checklist