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Manypotentiallyfundabledealsdonotgetfundedbecausetheyarenotawareofinvestorcriteria.Dr.GoldsmithservesasPresidentandChiefExecutiveOfficeroftheMississippiTechnologyAllianceandmaybecontactedatrgoldsmithtechnologyalliance.ms.Investmentopportunitiesthatcanaddressthekeyriskelementsintheirbusinessplanwillbetterpositionthemselvesforfunding.TherearesomekeyconsiderationsthatinvestorswilllookforwithineachoftheseareasTheprimaryproductconsiderationishowcloseistheproductorservicetothemarketIfitisstillintheconceptualorresearchstageitismoreriskythanoneinthepre-productionstage.Investorspreferproprietaryproductsovercommodityproducts.Proprietaryproductsarepricedandsoldonthevaluepropositionthattheydirectlyorindirectlyenhancetheoverallproductivityorlifeexperienceofthebuyer.Commodityproductstypicallycompetewithalargenumberofprovidersonthebasisofbeingfasterbetterandorcheaper.Themarketprotectionofferedbyintellectualpropertyprotectionintheformofapatentorcopyrightisattractivetoinvestors.Alsoaventurethatoffersmultipleproductstothesametargetmarketreducesinvestmentrisk.TheprimaryconsiderationformarketriskishowcloseistheventurenotjusttheproducttosalesSalesaretheultimateindicationofmarketvalidation.Beyondsalestheneedforalargeandgrowingmarketisfundamentaltoaninvestordeal.Capturingatargetmarketthatdemonstratesacommitmentandloyaltytotheproductandorbrandversusamarketthathistoricallyshiftsbetweenprovidersbaseduponthemostrecentinnovationsreducesrisk.Identifythestrengthsandweaknessesofthecompetitionandspecificallydemonstratehowtheventuresmarketingstrategywillcapturemarketsharefromthecompetition.TheprimaryfinancialconsiderationishowcloseistheventuretocashflowBeyondfinancialsustainabilitycashflowinsinuatesthatbusinesssystemsareinplaceforbasicoperations.Theneedforoneroundofinvestmentinfusionislessriskythanventuresrequiringmultiplerounds.Aclearlydefinedandachievablefinancialplanstrategiesandtimelinethatresultinpredicableprofitsreducesrisk.Investorspreferventureopportunitieswithbusinessmodelsthatgeneraterecurringrevenuesforthefinancialmodel.Theprimarymanagementriskconsiderationrelatestotheexperienceandskillsoftheentrepreneurfollowedcloselybythestrengthoftheboardofdirectors.Savvyentrepreneurswithexperienceinlaunchinganewventurewhetherthepreviousventurewassuccessfulornotreducesrisk.Serialentrepreneurshipcarriesmoreweightthanhavingbeeninlargecorporatemanagement.Investorsprefertoseealloftheexecutivepositionsheldbyexperiencedandqualifiedtalent.Likewiseawell-connectedboardofdirectorswithavarietyofskillsandbackgroundsishighlyvaluedbyinvestors.Someexecutionriskfactorsareinherenttothedeal.Forexampleventuresinmajormarketswithsignificantsupportresourcesandinfrastructurearelessriskythanventuresinruralmarkets.Fundingandventuresustainabilityismorelikelywhentheeconomyortheindustryishealthyversusoneinarecession.Ventureswithneweconomyemergingtechnologiesthatareattractivetopubicmarketsaremorelikelytobesuccessfulthanventureswithcoreoroldeconomyproductsorservices.Someofthemanageableexecutionriskfactorsaretheoverallinnovativeproductmarketingandproductionstrategiesfordeliveringasolutionthatsolvesalargeandpainfulmarketproblem.TheultimatequestiontheinvestorwillaskisDoesthisventurehavetheresourcestalentplanandopportunitytobethedominantventureinthemarketwithunfairadvantagesoverthecompetitionEntrepreneurswhocananswerthefivefundamentalquestionsanddeviseabusinessmodelandplanthatmeetstheinvestorcriteriaabovewillbepositionedforprivateequityinvestment.Butequallyimportantaddressingthepointsabovesendsasignaltotheinvestorthatyouunderstandwhatisrequiredforahigh-performanceventuretobesuccessfulyouunderstandinvestorneedsandcriteriaandyouhaveandwillcontinuetoexpendtheenergyandresourcesnecessarytobringyourventuretoasuccessfulconclusion.www.technologyalliance.ms151.ProductRisk2.MarketRisk3.FinancialRisk4.ManagementRisk5.ExecutionRisk