5 Key questions for Angels

I get asked a fair amount what does Keiretsu Forum and our K4 members look for in companies when be consider for investing. I've narrowed it down to 5 questions that allow me to cut the chase to if I want to learn more about a company or not. An an entrepreneur will always start to share about their company to the ninth degree because it is their passion and dream which can take a fair amount of time. So I try to always keep this in mind when I'm speaking with an entrepreneur as to not rain on there parade no matter where the company is at in the growth cycle. When I encounter an entrepreneur I ask them if they mind if I ask a few questions first before I hear about them and there company. 1) I ask if the company has any revenues? This will let me know quickly as to where the company is at from a life cycle and growth stand point. If it's pre revenue the the caution flag goes up for me but again every company starts pre revenue. With this question I ask what is their valuation? If they say pre 10 million pre revenues I wish them luck with their venture. I could spend a great amount of time on this one but I'll leave at I look for valuations between 1-10 million. 2) I ask the question do you have any IP (intellectual property), any patents, and patents filed? 3)What is the CEO/Founders back ground. I was in a wine bar one night last year having a glass of wine before heading home and I'm sitting next a gentleman. He had a fedex jacket I said oh you work for fedex and he yes but that's not really what I'm doing. We are working on a bio diesel play. My reply was oh really? He said yes we are planning on building our bio diesel plant and really building this thing out which it's going to be huge! I said we? He said yes me an my buddy that works with me at Fedex. I said well what's your back ground? He said we've been reading up on this and worked out our plan to build this. I said do you have anyone with this expertise or background in clean tech or energy space working with you? He said no. I said have you built a company like this? His answer was no. I said how do you plan to finance this and how much. He said we plan to go after private investors and he rattled off a big number and that's when my eyes rolled back in my head. The guy asks me what I do? I really didn't have the heart to tell him so I lied I said I'm a garbage man. 4) I'll ask who else is out there in the market place doing anything close to what they are doing and if they are the first market mover. If they say there is no competition again another caution flag goes up. If they explain where they are at with the competition or where they see the market going then I'll listen. 5) I ask what does their board of directors and advisory board look like? A smart entrepreneur is going to surround themselves with the best people possible that have industry expertise and something to contribute to the growth of there company. So when an entrepreneur says let me share more about my company. I literally know whether I want to listen to more or not at this moment. If its a company I feel Keiretsu Forum would consider I then will give them a business card, direct them to our website to apply online, or send them to Paul Luce our Keiretsu Forum NW entrepreneur director.