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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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.
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