POCD

Questions

1. Who are the people involved in the venture?

a. Who are the founders of the venture?

b. What have they done in the past?

c. What experience do they have that is directly relevant to the venture?

d. What skills do the founders have?

e. Who do the founders know, and who knows them?

f. What are the reputations of the founders?

g. How realistic are the founders’ projections?

h. Can the founders adapt to changing circumstances?

i. What are the gaps in the management team? Are the founders willing to relinquish control to others if necessary?

j. How will the founders react if the business doesn’t develop as planned?

k. Can the founders make the hard choices?

l. What motivates the founders?

m. How committed are the founders to the venture?

n. What objective information is available to evaluate the founders and their potential as a team?

o. What are the consequences if one or more of the founders leaves?

2. What are the opportunities for the venture?

a. Is the total market for the product or service produced by the venture increasing or decreasing?

b. Is the firm’s industry one that is or can become attractive?

c. Who is the customer?

d. What is the customer’s decision making process?

e. To what extent is the firm’s product or service desired by the customer?

f. How will the product or service be priced?

g. How will the venture reach its customers or market segments?

h. How much will it cost in time and resources to acquire a customer?

i. What are the costs of production and delivery?

j. What are the costs of servicing a customer?

k. What are the costs of retaining a customer?

l. When do you have to buy or spend money for the resources to be used by the venture?

m. When do you have to pay for the resources?

n. How long does it take to acquire a customer?

o. How long between when a customer is acquired and when the customer pays?

p. What investment in capital equipment is required to support a dollar of sales?

q. Who are the competitors?

r. What resources are controlled by the competitors? What are the competitor’s strengths and weaknesses?

s. How will competitors respond to the entrance of the venture into their market?

t. What will the venture’s response be to the competition?

u. Who might be a competitor in the future?

v. Are there ways to block actual or potential competitors? Can alliances be formed to help block the competition?

3. What is the context of the potential opportunity?

a. What are the surrounding economic conditions?

b. What is the regulatory environment?

c. Are there other factors that might change the context of the venture?

d. Do the founders understand the context of their business?

e. Can the founders respond to changes in the business context?

4. What are the terms of the Deal?

a. What new information would change your perception of the new venture?

b. How much time and information is required to obtain the information necessary to fully evaluate the deal?

c. Can the new venture control the rate at which it exploits an opportunity?

d. Who else might be pursuing the same opportunity?

e. What incentives are offered by alternative allocations of risk and reward in variations of the deal?

f. Who will be attracted by the terms extended in the deal?

g. What happens if each party to the deal behave solely in their own perceived self interest?

h. Who are the potential investors?

i. What amount of money is needed, and how will that money be used?

j. What are fair terms for the deal, and how will the terms provide the appropriate incentives for each side under a variety of conditions?