Five key questions investors should ask
Whenever assessing a potential investment, the first five elements I consider are:
Is this a commercially viable market? (sufficiently large patient populations, willingness to pay, reasonable levels of competition, etc.)
Is this an innovative technology with strong scientific rationale?
Is this a commercially defensible idea with strong IP?
Is the management team experienced and capable of executing the business plan?
Are there potential exit routes, either through a trade sale, IPO, etc.?
A high quality company should recognize these as frequent questions from investors and address them upfront and transparently in any pitch. As an investor, it is up to you to assess the company’s strength across these initial metrics and determine whether any potential risk is appropriately priced.
If the company checks all of the initial boxes, further diligence will focus on additional business, legal, and ESG diligence as well as a review of any prior investors. For example, if we in Hadean Ventures were assessing a potential Series A investment , the quality of existing seed investors and their engagement and continued support for the company would be a key determinant.
Contribution by
Katherine Mellis, Hadean Ventures