How do investors evaluate ideas?
This is something I have been constantly evaluating throughout my journey as a founder. Upon talking with investors I have realised this is something that they often don't know themselves or don't have a concrete answer for.
Sure a lot is future potential, or the team but it would be great to get the ball rolling on what things they could be looking out for that they might not think of.
As a founder you're surrounded by other founders so what would you think looking at it through a different lens would be some different KPI's for investors?
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Having looked at it from both sides, in my opinion, investors don't evaluate ideas.
Investors evaluate business proposals, measure them with a price, and the potential investment outcome.
Are there any relevant macroeconomic, technological, or regulatory changes that drive the creation of a new market?
Everyone shits at WeWork, but they build a 16B business by leveraging the fallout of the financial crisis of 2008. Uber was built on the existence of GPS+ Mobile phones. In 2022, it's not hard to build such a business, but in 2010 that was a gamble. Not only in terms of team and product but also if the adoption of smartphones would be high enough to allow for a relevant market size to exist.
Does this product exist somewhere else already and can be effectively copied in another jurisdiction?
The rest is risk management.
Is the market/team fit?
How long do the founders know each other?