What Makes a Strong Investment Thesis for a Startup?
A strong but clear investment thesis of new venture startups is one of the strongest instruments employed by investors to consider new opportunities. In the case of founders, knowing how investors develop such a thesis can be very helpful in raising funds. An investment thesis does not apply as a summary of why a startup should be funded; it is a structured analysis of market potential, competitive advantage, scalability, and payoff. When you understand what the investors seek, then you can place your company in a better position. The following is what constitutes a strong investment thesis of a startup. 1. A Large and Growing Market Opportunity The initial component of a good investment thesis is an obvious, large market opportunity. The investors are concerned that the startup is able to expand and gain a significant market share. An interesting thesis contains: An identified target market. Real market size estimations (TAM, SAM, SOM). Marked signs of increasing demand. Acute ...