Dirkjan at 19:54, 27 August 2020

2020-08-27T19:54:34Z

Dirkjan: Replaced content with "Criteria for evaluating venture opportunities Category:mbi Category:M10 Category:Model"

2020-08-27T19:18:32Z

Replaced content with "Criteria for evaluating venture opportunities Category:mbi Category:M10 Category:Model"

Dirkjan: Created page with "{| class="wikitable" !Criteria !Attractiveness ! |- ! !Highest potential !Lowest potential |- |'''Industry and markets''' | | |- | |Changes way people live and work |Increment..."

2020-08-25T07:58:20Z

Created page with "{| class="wikitable" !Criteria !Attractiveness ! |- ! !Highest potential !Lowest potential |- |'''Industry and markets''' | | |- | |Changes way people live and work |Increment..."

New page

{| class="wikitable"
!Criteria
!Attractiveness
!
|-
!
!Highest potential
!Lowest potential
|-
|'''Industry and markets'''
|
|
|-
|
|Changes way people live and work
|Incremental improvement only
|-
|Market
|Market driven: identified recurring revenue niche
|Unfocussed: one time revenue
|-
| Customers
|Reachable; purchase orders
|Loyal to others and unreachable
|-
| User benefits
|Less than one-year payback
|Three year+ pay back
|-
| Product life
|Durable
|Perishable
|-
|Markte structure
|Imperfect, fragmented competition or emerging in industry
|Highly concentrate or mature
|-
|Market size
|\$100M to \$1B sales potential
|Unknown, less than \$20M
|-
|Growth rate
|Growth at 30-50% or more
|Contracting or less than 10%
|-
|Market capacity
|At or near full capacity
|Under capacity
|-
|Market share attainable (<5 year)
|20% or more; leader
|Less than 5%
|-
|Cost structure
|Low cost provider, cost advantages
|Declining costs
|-
|'''Economics'''
|
|
|-
|Time to break even
|Under 1,5-2 years
|More than 4 years
|-
|ROI potential
|25% or more
| Less than 15-20%
|-
|Capital requirements
|Low to moderate, fundable
|Very high, unfundable
|-
|Internal rate of return potential
|25% or more per year
|Less than 15% per year
|-
|Free cash flow characteristics
|Favorable, sustainable 20-30% or more of sales
|Less than 10% of sales
|-
|Sales growth
|Moderate to high (+15% to +20%)
|Less than 10%
|-
|Asset intensity
|Low/Sales \$
|High
|-
|Spontaneous working capital
|Low, incremental requirements
|High requirements
|-
|R&D/captial requirements
|Low
|High
|-
|Gross margins
|Exceeding 40% and durable
|Under 20%
|-
|After tax profits
|Great than 10%
|Low
|-
|Time to break even
|Less than two years
|Greater than four years
|-
|'''Harvast issues'''
|
|
|-
|Value added potential
|High strategic value
|Low strategic value
|-
|Valuation multiples and comparable
|20X PE/E
|<=5XP/E
|-
|
|8-10XEBIT
|3-4XEBIT
|-
|
|1.5 -2 X revenue
|<= 0.4Xrevenue
|-
|
|8-10Xfree cash flow
|-
|Exit mechanism and strategy
|Present or envisioned options
|Undefined; illiquid investments
|-
|Capital market context
|Favorable valuations; timing, capital available, realizable liquidity
|Unfavorable, credit crunch
|-
|'''Competative Advantage Issues'''
|
|
|-
|Fixed and variable costs
|Lowest
|Highest
|-
|Control over costs, prices and distribution
|Moderate
|Weak
|-
|Barriers to entry
|
|-
| Propretary protection
|Have or can gain
|None
|-
| Response/lead time
|Competition slow, napping
|Unable to gain edge
|-
| Legal, contractual advantage
|Proprietary or exclusivity
|None
|-
| Contracts and networks
|Well-developed; accessible
|Crude
|-
| Key people
|Top talent; an A team
|B or C team
|-
|'''Management team'''
|
|
|-
|Entrepreneurial team
|All-star combiation; free agents
|Weak solo entrepreneur
|-
|Industry and technical experience
|Top of the field; super track-record
|Underdeveloped
|-
|Integrity
|Highest standards
|Questionable
|-
|Intellectual honesty
|Know what they don't know
|Do not want to know what they don't know
|-
|'''Personal criteria'''
|
|
|-
|Goals and fit
|Getting what you want but wanting what you get
|Suprises
|-
|Upside / downside issues
|Attainable success / limitted risk
|Linear, on the same continuum
|-
|Opportunity costs
|Acceptable cuts in salary etc
|Comfortable with status quo
|-
|Desirability
|Fits with lifestyle
|SImply pursuing big money
|-
|Stress tolerance
|Thrives under pressure
|Cracks under pressure
|-
|'''Strategic differentiation'''
|
|
|-
|Degree of fit
|High
|Low
|-
|Team
|Best in class
|B team
|-
|Service management
|Supervisor service concept
|Perceived as unimportant
|-
|Timing
|Rowing with the tide
|Rowing against the tide
|-
|Technology
|Groundbreaking
|Many substitutes
|-
|Flexibility
|Able to adept
|Slow stubborn
|-
|Opportunity orientation
|Always searching
|Operating in a vacuum
|-
|Pricing
|At or near leader
|Undercut competitor
|-
|Distribution channels
|Accessible
|Unknown
|-
|}

Part of: [[M10-S1 - Reading - Opportunity Recognition- Jeff Timmons|M10-S1 - Reading - Opportunity Recognition- Jeff Timmons]]
[[Category:mbi]]

[[Category:M10]]

[[Category:Model]]

Criteria for evaluating venture opportunities - Revision history

Dirkjan at 19:54, 27 August 2020

Dirkjan: Replaced content with "Criteria for evaluating venture opportunities Category:mbi Category:M10 Category:Model"

Dirkjan: Created page with "{| class="wikitable" !Criteria !Attractiveness ! |- ! !Highest potential !Lowest potential |- |'''Industry and markets''' | | |- | |Changes way people live and work |Increment..."