Criteria that professional investors use in 'winners' identifying process

Based on research note Investor Driven innovation: What can we learn from the way professional investors spot 'winners' by

Clarysse et al. (2012).

International Professional Master in Management of Eco-Innovation

Anna Aghvanyan 19.03.2012

Investments have huge role in the development and growth of businesses.

But, How to become the next Google?

To get funding start-ups must: Have high potential technology, Have clear target Have rapidly growing markets, Have strong managerial support

The criteria for identifying 'winners' with high-technology opportunities and minimum requirements are:

Criteria Venture capital

Product Disruptive technology or explicit improvementGood cost/ efficiencyDo at least 2 times better

Market Existing market: big enough, measurable and reachableNew market/ large growth potentialGeneral:-Little concentration (few players), leadership potential-Good knowledge of competitive dynamics-Be able to really change the game

Management team Proven track record: with previous entrepreneurial experienceHigh energyExperience in the domainCohesive team that can be easily adapted

Return 30-40% return

Recommendations for investment decision making

1. Enhance the advice from the community of investors, entrepreneurs, scientists, lawyers and other professionals.

2. Use certain criteria and personal heuristics developed over time.

3. Be within the network of individuals and organizations related to the innovation and technology process.

Concluding remarks

Decision making and identifying process is quite

complicated,

But if your company succeed in investing in innovative

high technology opportunities with rapidly growing

markets potential,

It will become the next successful funder getting huge

strategic and financial profits.

Thank you for your attention