Investment opportunity evaluation checklist includes:

Business Concept and Market

1. How is the idea unique?
2. Is the overall market large and growing?
3. Is the target market niche valid?
4. Can this company be the first-mover?

Product and/or Service

1. Is the initial product/service unique?
2. Is the intellectual property patented or patentable?
3. Does the initial product/service offer a compelling value proposition?
4. Is the initial product/service ready for market?
5. Can the product/service be developed in a reasonable time?
6. Is the product/service scalable and expandable?

Business Model

1. Is the overall business strategy valid and clearly articulated?
2. Have the target customer demographics and buying criteria been defined?
3. Does the product/service solve a significant problem or buyer need?
4. Is the marketing strategy compelling?
5. Can the company achieve and sustain a competitive advantage?
6. Is the distribution channel defined?
7. Have strategic partnerships been identified or closed?
8. Have the revenue streams and pricing models been identified?
9. Have key operating goals been identified and is there a clear plan to achieve them?
10. Is there a clear path to achieving high growth rates?
11. Are there existing customers and do they validate the business model?
12. Is the overall business model sustainable?
13. What are the projected revenues / market share?
14. Will the company become profitable in a reasonable time period?

Business Financials

1. One year cash flow forecast
2. Break-even analysis

Management

1. Do the founders have passion for the business?
2. Have the founders started other ventures that provided a high ROI to investors?
3. Is the operating management team complete and do they have the required expertise, experience and industry contacts?
4. Have key board members been recruited? If so, Who are they?
5. Have key members of the advisory board been recruited?
6. Have relationships with first-rate professional service firms been established?

Exit Strategy

1. Has the exit strategy and time frame been identified and is it achievable?
2. Are there comparable companies who have produced a high ROI to investors?
3. Have the overall risks to the venture been identified and can they be overcome?
4. What is the expected ROI to the investor?

Deal Documentation and Terms

1. Does the Executive Summary clearly describe the investment opportunity?
2. Is the Business Plan comprehensive and easy to understand?
3. Is the Investor Presentation persuasive?
4. Has the company done the legal work necessary (board authorization, state filings, etc.) to enable investment?
5. Have the investment documents (stock purchase agreement, etc.) been prepared and are the terms acceptable?
6. Is the funding plan and amounts sufficient to achieve profitability and/or the expected exit strategy?
7. Is the pre-money valuation for this round reasonable?
8. Are the founders able to convincingly answer questions about the market, the company, and the deal?
   

Miscellaneous

1. Do the founder's references checkout?
2. Who else has invested or is interested in this deal?
3. What further due-diligence is necessary?