BEFORE YOU START
LIFESTYLE VS. INVESTaBLE BUSINESSES
Investable businesses are different from lifestyle companies in that they are scalable, durable, and sellable. They have a focus on growth, plan for, and expect to get acquired. They tend to be higher risk, have larger market opportunities, and oftentimes require world class professionals to run the company effectively.
"Lifestyle companies are usually owned and operated by an entrepreneur and his or her family, or a small group of partners. They tend to grow revenues slowly without investor capital and most do not need a substantial number of employees. Examples of lifestyle companies could be: single store retail outlets, software developers, restaurants, franchisees, lawyers, plumbers and many others." -Bill Payne & Associates
PUT YOURSELF IN THE SHOES OF AN INVESTOR
- Are you going to blow my initial investment, or are you going to make me a ton of money?
- Are there customers for what you are building? How many are there? Now? Later?
- Is there a profitable business model? Can it scale?
- And finally, is this a team that can build this company?
WHAT TO DO
Read Paul Graham's Before the Startup.
Read: Understanding Investors.