Know the Rules and Plan Accordingly
"There are some fundamental rules successful investors, be they angels or VC’s, have in their bible...
Rule No 1 - The idea is worth only 20% of the value of the venture...
Rule No 2 - People – not ideas technology or money - build companies, thus they are worth 50% of the value of the venture...
Rule No 3 - Structure is worth 30% of the value of the venture. Investing millions in a brilliant idea executed by a skilled, passionate and connected entrepreneur without a structured and validated market, sales, operation, product development, financial plan and team to execute it will burn through any investment in a very short period without creating revenue.
Rule No 4 - Only products and services that can relieve a significant identified group of customer’s pains can generate revenue...
Rule No 5 - Investors expect to exit with significant returns within six years...
Read more in this essay by Gerry Lemberg that he uses as a supplement to a seminar called “Planning, Funding, Executing, and Exiting a New Venture” which he gives regularly.
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