AgVA’s focus remains on the capabilities of the underlying technology, we want to understand what risks remain (and what you’re doing to mitigate them), as well as your production / go-to-market approach. Markets, financials and full teams become more important, though we still accept gaps in the complete picture and business plan. But clear identification of the key success variables and missing pieces is important. Please be prepared to answer, in detail, the following criteria if AgVA chooses to pursue an investment.
What is the problem you are trying to solve? What pain point are you alleviating for your customer, and why would they pick you? What are their alternatives? From a customer perspective, is the value proposition jaw-dropping, and do you have customer referrals to prove it?
At this moment, what is the status of the underlying technology/product/service? How much further does the technological innovation need to scale to meet commercial standards? What is the margin of error if the product is underperforming or exceeding the expected cost targets? What needs to be achieved to make your value proposition compelling?
Who are you, and why are you qualified to lead this opportunity? Are you the long-term CEO of your company? What skill sets do you bring, and what skills will your team need to add? What parts of your executive team still require filling out? What are the team’s relationships with thought leaders in the field?
Market & Competition
Do you have a good understanding of the competitive landscape? Are you comparing your company against the competition in areas that matter to the end customer? Who are 6 ideal customers who will make your company successful, and what are you doing to obtain them? What are the threats that could make the market opportunity obsolete? How does your solution fit into the existing ecosystem, current standards and incentives?
What customers or users do you have? How have you retained them? How will you increase their number exponentially and continue to retain them?
What is your go-to-market strategy? Have you identified the right partnerships? Does your price point justify the cost of sale? Why will consumers use your product over its competitors? What keeps you awake at night? Do you understand your risks? Are they clearly defined, and do you address them in your marketing or technology strategy? The quality of your assessment of market risk helps us judge how well you understand your market.
Financials & Milestones
Please include your financial projections (min. 5 years), profit and loss statement, balance sheet and an updated cap table. Accuracy is more important than precision. Contingency planning on the financials is even more critical. What happens to your financial needs if technology or market development slips or costs are too high?
What are the milestones this financing round will achieve? How far are you from being cash flow positive, in terms of both time and money? How many future rounds of financing do you project? What would make your company run out of cash, and what does the worst-case scenario look like in terms of cash flow? For revenue-generating companies, what is your sensitivity to lower-than-expected revenue? Has your revenue ramp been tested?