One of the good question and very complex too. Here are my top 12:
- Strong CEO and Team - This is 50% as a strong team can fix everything else. And a CEO that has built and exited a company before, ideally. Young, new entrepreneurs will need a stronger team, advisers and board.
- Large market opportunity. Usually, $1 billion plus in 5 years.
- Clear market entry strategy, going after a niche (small market) and expanding into other niches or broader market after 1–2 years to make product and other infrastructure robust.
- Creation of barriers to entry, or sustainable competitive advantage. We teach 17 ways to do this beyond just intellectual property at CEO & Entrepreneur Training
- Gross margins over 50%
- Product sales with some data on cost of customer acquisition, conversion and life-time value (resales)
- Recurring revenue from same customers
- A financing strategy that shows the potential step up in stock as new milestones are reached, and more funding may be needed (to avoid dilution and see growth in equity value)
- CEO is coachable and will listen to investors, team, market and everyone else to adjust and pivot if/when needed.
- A nice head starts in a new emerging market. Generally, at least a year, but could be a few years to start.
- High commitment and intellect on the team with “skin in the game” via cash or sweat equity.
- A big vision for what the future will look like to understand building towards that.
Also check out my blog and follow me here on Quora as I have loads of posts on entrepreneurship, scaling and raising capital.
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We also offer The CEO Boot Camp that has graduated thousands of entrepreneurs and CEO from 40+ countries since 2004 for the most serious Entrepreneurs as an alternative to getting an MBA. Better in four ways. These courses contain highly practical roadmaps, models, and checklists, all curated over my two decades as a Serial Entrepreneur to create a holistic and comprehensive framework for entrepreneurial success. Taking my engineering experience and structured thinking and applying it to entrepreneurship.
May all your ventures be successful” by my definition above ‘0) It is just as easy to design and grow a large business as a small one with our 24 hours per day. This just takes more thought and critical thinking with good strategy.
Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.
Call (619) SCALE06 or email info@AirTightMgt.com for a complementary strategic consultation