1) Integrity/honesty 

• Are they sincere and trustworthy?
•  Are their values similar to yours?

    2) Expertise

• Do they understand the process of investigating a business idea and creating a business?
• Do they have the array of skills needed for the project (e.g. marketing, financing, negotiation, etc.)
• Have they done this before?
• Are they regarded as leaders in the business community?

    3) Commitment

• Are they committed to bringing the business to fruition?
• Have they invested their own money in the venture?

    4) Advisory Team

• Have they assembled an advisory team?
• Is the advisory team well regarded in this field?
• Does it contain industry, business and marketing consultants, along with legal and accounting advisors?
• Are gaps in the leader’s skills covered by those of advisory team members?

• Do they have a clearly defined business model?
• Does the model describe how the business will make money?

• Are there budgets of per unit costs and revenues?
• Do these budgets use realistic assumptions and project adequate profit margins?

• If the business produces a commodity, is it a low cost producer relative to its competitors?
• If it produces a unique or differentiated product, can it realistically command a premium price?
• Are risk mitigation programs in place to provide protection from unexpected occurrences?

C) Management – Is management capable of successfully operating the business?

    1) If Management has Not been hired

• Will the leaders search for the most qualified candidate and pay the person the wage needed to attract him/her to this business?

• Do the managers:
  • have experience in the industry and know its key players?
  • have experience starting and running a business?
  • have a positive track record?
  • have experience in the businesses’ core functions (e.g, marketing, procurement, etc.)?

D) Markets/Industry – Will people/companies buy the product?

    1) Industry Analysis

• Has a third party feasibility study been conducted?
• If not, have the industry and markets been thoroughly analyzed relative to the opportunities for this business venture?

• Are there contracts in place with buyers of the product?
• If not, is a solid marketing/sales team in place?
• If not, will the outputs be sold through a marketing firm?
• If so, does it have a positive track record and reputation?

• Are there contracts in place with sellers of raw materials, ingredients and other inputs?
• If not, will the inputs be purchased through another firm?
• If so, does it have a positive track record and reputation?

• Have potential competitors been identified?
• Can the business beat the competition?

• Do they plan to build a new facility?
• If so, is the general contractor experienced, competent and sufficiently funded?
• Are performance contracts and assurances in place?
• Are all permits in place and regulations met?
• Do they plan to lease a facility or have the product toll processed?
• If so, is a contract in place with the proper assurances?

• Is the processing technology proven?
• Is the technology provider experienced and competent?
• Are performance contracts and assurances in place?
• Will the output meet market requirements?
• Is proprietary technology involved?
• If so, is it protected through a patent or as a trade secret?

G) Financial - Are there sufficient funds in place for start-up and
       operations?

• Is there sufficient capital to: 
  • fund operations until the facility is up-and-running at full capacity and revenue is generated from sales?
  • cover business operations if unexpected problems arise that delay business start-up?
  • provide liquidity to meet operating needs after the facility is up-and-running?
  • cover an unexpected industry downturn?

• Is there sufficient equity planned?
• Is the equity offering “minimum” adequate to capitalize the business?
• Can the current equity campaign raise this level of equity?
• Does the legal structure provide adequate liquidity for shares?
• Does the plan for distributing profits versus retaining profits meet your expectations?

• Are lender(s) in place to provide sufficient debt financing?
• Are the lending terms reasonable?

• Do the financial projections appear reasonable?
• Do the price, conversion and other assumptions appear reasonable?
• Do the projections show an adequate debt repayment ability?
• Is profitability projected under various price levels?

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