What Investors Look For When Evaluating Your Pitch: Mohamed Hamdy Overvaluation or terms that are not reasonable for the investors make a great idea, but is not necessary feasible.
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When evaluating any investment there are many things to look for, but I can divide them into the following categories:
1. Team. Domain expertise, technical partners. I don't believe in outsourcing key development tasks. You outsource admin work, not development work.
2. Domain. If I am investing here in the region, I would focus on ventures looking to build a utility- basically infrastructure. Another domain I would look for is very specific verticals that are localized. This approach is time-relevant for the current situation.
3. Favorable investment terms. Overvaluation or terms that are not reasonable for the investors make a great idea, but is not necessary feasible. Covenants and valuations are two variables I would look at here in the region; obviously terms get more complicated in the West.
4. Unorthodox advantage. I would like the team or the startup to start their journey with some sort of a competitive advantage which is not assumed. Potential customers that make sense is not one of them, possible JVs also don't count, until it's actual and confirmed.
5. Other investors. I like tagging along with other investors- only with angel and VC investing. In my PE career, that was not necessary especially if I was looking to implement activism across the board and operations. There's comfort knowing other investors are getting on the same boat- smart ones, I don't want to get in trouble and stuck with fools.
