Investors have a variety of investment processes, depending on the nature of the investor and the area of expertise.  Angel investors usually have limited due diligence capabilities, but deep interest in personnel dynamics.  Angel groups layer this with formality, but only have the depth of knowledge that can be mined from the group.  Traditional venture firms have an investment process which may include internal review and “outsourced” due diligence, but with a slow and sometimes opaque schedule that leaves the entrepreneur at risk.

incTANK looks for early-stage start-ups that have defensible technologies, a significant market potential, and a competent management team.  Most of our investments occur near one of our offices, and are focused on the computational sciences, life sciences and material sciences.  We like to keep in constant contact with a candidate team during the early engagement and due diligence process, so that both sides know where they stand. 

The incTANK process usually starts even before a company is established.  Even at that stage the entrepreneur should have an understanding of the technology, market, and development strategy.  This will be the foundation for an executive summary that could be used for both potential customers and interested investors.  The executive summary should outline:

• Key product or service offered, and pricing model
• Target market and the characteristics of that market
• Distinctive technology and related intellectual property rights
• Existing competition and the company’s competitive advantage
• Summary of financials, including capital needs
• Team, including bios of key management

As the team develops and the business model becomes clear, a more detailed business plan will back up the executive summary.  Some of the key questions the business plan should address include:

Business

• What is your corporate vision?
• What problem does your company address and who will pay for it?
• What is the value to the customer and how can you capture that value?
• What is your execution plan and who are the strategic partners in that plan?
• What is your exit strategy?

Market

• What is the size and growth of the market opportunity that you address?
• What are the characteristics of your target customer?
• Who are your current and future competitors?
• How are you different from the competition?

Technology

• What is the key technology, and at what stage of development is it at?
• Where did the technology originate from, and what are the related intellectual property rights, if any?
• What is the technology development path?

Team

• Who are the members of the core team and what are their roles?
• Who are your advisors and board members?
• What are your team needs and what is your hiring plan?

Sales & Marketing

• Who are your first customers?
• How and when do you plan to reach your target market?
• What is your sales and channel strategy?  

Financial

• How much capital does your business require?
• How has your business been funded to date?
• What is the current ownership structure?
• What is your historical and projected financial performance?