After the diligence is complete and the open questions answered, the team must decide whether or not to invest.

It’s important to identify the risks and write them out in the report.

The team should articulate an investment thesis that includes the opportunity in the deal such as how big it could become.  

The team should include the potential exit value and how long it will take to reach it. 

The team should also clarify their assumptions around the deal and write it out as well.

To decide to go forward, take the temperature of the team. It’s either heating up or cooling off.

Monitor the company’s progress to see if it continues to demonstrate a growth story.

If enough investors want to move forward, then the investors should pursue it.

If not enough investors want to move forward, then it’s a pass.

It’s important to make a timely decision as the entrepreneur needs to know the group’s position.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.