What Can You Invest as an Accredited Investor?
When looking for projects to finance, investors must analyse the variables surrounding the startup candidates. From the different metrics already generated by the company during its period of activity to the different clauses proposed by the founders of the startup for the partner agreement – everything must be taken into account by the investor.
Among these factors, the most vital is the composition of the startup’s founding team. If the project engine does not have certain characteristics, it may be better to decline the opportunity as an investor.
Level of Experience
The truth is that age does not matter. Usually, the creation of a startup and its first phases of life are associated with young entrepreneurs. Yet at the end of the day, regardless of age, the founders of a startup will not be afraid to invest all the necessary hours in their project.
However, age is not the only factor in analysing the profile of the founding team of a startup. In fact, experience is more important than age. The fact that the founding team (or some of its members) has previous experience in the company is a positive point.
In addition, if any member of the original project group has previous experience when founding a company or working in the first phases of the company, they are more trustworthy for investors to finance.
Initially, the founding team of the startup will be a limited group. They will likely be made up of a few professionals who have to juggle between both the company’s operations and its growth.
Hence, the investor must first check if the project has complementary talents that can carry out the titanic work necessary in a newly born company.
However, it is also important that all this multidisciplinary talent is limited. In other words, the investor must first verify that the work area of each founder is well defined:
- The CEO should lead the project.
- The CTO should be the group’s most outstanding technological expert to address technical issues.
- The CMO should be in charge of the project’s marketing.
- Above all, there should be a financial director responsible for the project accounts.
Firstly, if the functions are clearly delimited, it ensures that the entire team’s efforts will be well distributed. Secondly, this will help avoid scenarios where tasks remain undone because they are not clearly assigned to any member.
Ultimately, understanding how the founders of a startup work is essential. That way, as investors, we know where we are placing our money. This is especially true if you are an accredited investor, where your investments are allowed to be in those with higher risks.