Investing in startups

Question 1

Which four steps can a startup be defined?

Answer 1

Idea
Development
Market Entry
Growth

Question 2

In the Idea stage of a start up, in what way does it need financing?

Answer 2

• Validate a sustainable business idea, preferably scalable with an unfair competitive advantage

Question 3

In the development stage of a start up, in what way does it need financing?

Answer 3

• Build your MVP (Minimum Viable Product) or service and validate if it meets customer demand

Question 4

In the market entry stage of a start up, in what way does it need financing?

Answer 4

• Market your MVP or service your target customers and establish repeat sales that can scale.

Question 5

In the growth stage of a start up, in what way does it need financing?

Answer 5

• Scale up sales and operations until profitability and maybe beyond to fuel continued high growth

Question 6

Which are the four types of financing?

Answer 6

Revenue
Debt
Grant
Equity

Question 7

How can a startup define its success?

Answer 7

Success
• Public company – listed on stock exchange
• Private company – independent and profitable
• Acquired (M&A) Mergers and Acquisitions– subsidiary of a large company

Question 8

How can a startup define its failure?

Answer 8

Failure
• Bankruptcy – disorganized shut down
• Liquidation – organized shut down
• Living Dead – stagnation, inactivity

Question 9

What kind of supply and demand does a startup have?

Answer 9

• Price equilibrium: available startups vs available capital
• Boom economy: slightly more startups vs significantly more capital
• Recession: slightly less startups vs significantly less capital