the mental mapping of a startup opportunity
you have questions, we've got answers
Hey there,
Dragos here, from Project Arrow, where we mentor founders about how to build from 0 to 1 and get their startups investable in the process.
Last week’s email sparked many follow-up questions (reminder - you can always reply to this email for asking stuff out, don’t be shy!), so I thought it’d be interesting to get an investor’s opinion about how they evaluate startup ideas, particularly early stage ones.
Meet Emmet King, co-founder and the CIO of J12 Ventures, one of the more active investors in pre-seed and seed startups out of Sweden. Here’s what he had to say:
In simple terms of a mental mapping of a startup, the three things it boils down to are:
Is the size of the opportunity large enough?
Is it difficult to pull off? i.e. enough risk
Does the team, and the way they are looking to execute, appear to be world class?
Or to put it another way. We are generally looking to invest in what can become category leading companies, so that implies that at least one of the following needs to be true:
They are creating a wholly new market. Therefore can define and become the leader of it.
They are entering into a large existing market that is undergoing significant shifts that change the landscape and move the goalposts (could be behavioural change, regulation, technology, etc...). Therefore there is the opportunity to drive that change and take the space created by it.
They are introducing a product/technology that is significantly better (the 10x idea) than the incumbents.
So understanding which of the above might be true is also part of the quick initial assessment.
Got follow-up questions for Emmet? Hit reply and we’ll have them answered.
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Ella, building a healthcare app for women during and after pregnancy, is looking to raise $1 million. See their pitching deck.
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