VC investment is all about identifying startups with terrific growth potential and funding them to accelerate that growth to generate bigger returns sooner.
When it comes to identifying growth potential, a couple of things are known to be key decision factors for investors: is the founder or managing team “investable”, and is the business built on a solid idea and viable brand?
VCs have a clear framework for evaluating the former, based on years of experience of seeing who is and isn’t successful. They can usually quite quickly determine which founders or management teams have the potential to be great entrepreneurs and leaders, even when they don’t yet have a solid track record. But they can be less good at assessing the IP protection that safeguards a startup’s innovation and brand.
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