If you come across a single founder with no in-house tech team, do not give them your money. Outsourcing tech is never a good thing. On top of that, look if the team has knowledge gaps. You want a team with good domain experience, an in-house tech expert and favorably previous startup exits. Teams that have worked together before (and didn't just meet) are also a good sign of a strong entrepreneurial bond.
Product or Service
If it is not really a huge problem (or it has already been solved), then look away from the opportunity. Maybe the problem is their, but the solution doesn't solve it directly. The actual product or service is one of the most important parts, so it better solve a major solution in a unique way. Look for the game changer.
If the startup does not have a customer segment or audience outlined, do not invest. Every company should have a plan on how to actually sell their service or product. Ask for analytics or data supporting how they came to their selected audience and why they picked the strategy or channels that they did. This section should be very detailed and should include in-industry contacts, marketing, business development channels, and proof of interest.
If it is only partially built with no ready release date, do not do it unless you think it is the next Facebook. Traction is what proves if people are actually interested in the product or service. A good way to gauge good traction is looking at usage if it is an app and revenue if it is a product. More than 11-15k per month is great and over 1000 users are great as well. Another indicator of a good investment is previous investment and investors. Usually, if it has 500k or more and is cashflow positive, the startup has something meaningful going on.
If it is a niche market with a clear leader, do not invest. However, if it is a multi-billion dollar market with little innovation or some new entrants but not many...go for it. Ensure the industry is ready for a disruption though if it is a big innovation.
By: Erica Amatori | Insta and Twitter: @ericaamatori