Netsells Ventures: Our Development Sweat Equity Criteria
As well as continuing to service corporate clients, we are increasingly seeking opportunity to support high-potential projects with our skills and expertise in exchange for equity; becoming partners in the truest sense of the word.
With eight holdings and one successful exit to date, we continue to work to refine our processes, documentation and criteria for enabling efficient agreements to be executed with minimal disruption and cost.
So how do we decide which ventures are right for us?
While there’s a whole range of factors when looking at the specific detail and terms of any deal, we have broadly classified our criteria into four core considerations; People, Product, Market and Time.
People - Do the people in the business have what it takes?
We firmly believe that there's only one absolutely ubiquitous trait of all successful startups; the team. With the best concept and will in the world, no startup has ever succeeded without being driven relentlessly by a team of smart, committed people or a relentlessly capable individual.
When assessing whether or not we wish to invest, we meet the people we will be working with first. Do they have what it takes to make this work? Will they put the hours in? What have they done before that makes them the best person to lead this business? Do they truly believe their product and business can be great - not just good?
Too many people try to make something of a mediocre concept in the pursuit of money, fame and happiness without objectively critiquing the actual value their concept is bringing to the table. We look for substance over style from founders who are commercially driven and aware; we’re not in this game to be famous. We can get behind the ‘rich’ part.
Netsells ventures would be significantly more likely to get behind a strong founder with a reasonable concept than a great concept with a reasonable founder. We can fix a products flaws, we will always struggle to make you a better founder.
Product - Is the product well thought out, and can our influence help to see it become exceptional?
We don’t expect the products and ideas that walk through our door to be perfect. Our discovery phase and subsequent programmes are designed specifically to refine and hone your concept to make a good idea into a great product.
What we look for is a product concept with good logic as its fundamental base. Is the idea for the product sufficiently considered so as not to have what we would determine ‘fundamental logic flaws’. If we can easily identify critical flaws in your fundamental product concept that have not been recognised, acknowledged or addressed, it’s a sign that it perhaps needs to spend more time in the oven.
Beyond the fundamental concept, we look to the following questions:
- Is there a need? Is there likely to be sufficient demand for a product in this space to yield positive returns with moderate adoption?
- Does this solution correctly address the problem? Whilst there may be a need, does the proposed solution correctly address that need? If not, is it easily rectified?
- Is there a clear MVP (Minimum Viable Product)? Does the idea require significant development, effort and capital before its able to go to market?
Market - is the market active, growing and can we add value?
When assessing the market, we consider many things. Some of the most important are:
- Who would we be competing against, and can our product stand its own or differentiate sufficiently to adequately challenge? How saturated is the space more broadly?
- How big is the market? Are there enough people who would be interested in the product to make mass market adoption plausible, or is there sufficient value in a niche to make it worthwhile?
- Is the market seeing a positive trajectory? If not, can this product help to turn that around?
- Is the market ready for disruption? Are consumers looking for something different, and is the status quo not fit for future demands?
Every project and business is different, and every market has its unique challenges. Whilst we don’t shy away from tough challenges, we prefer opportunities with clear cut viable routes to a growing market that’s ripe for disruption.
Time - Is it the right time for the product in the chosen market?
Many businesses have fallen foul of ‘moving too early’. While the window can often be narrow between too early and too late, some concepts are simply a step too far too soon. In most cases an interim solution can be found, but changing consumer habits is a monumental task, and it's crucial that change is considered and managed incrementally where it involves fundamental changes to the status quo.
Ready to launch your idea?
Our Ventures division is no longer just an idea - it’s a fully operational division of our business and a division that we see as a crucial component of our future strategy. We firmly believe that by working hand-in-hand with committed, talented and ambitious entrepreneurs we can leverage respective strengths to build something exceptional together.
We have driven countless startups through all stages of their journey from inception to exit, we know what it takes, and we want to be there every step of the way.
Think you're right for Netsells Ventures? Get in touch today; we would love to meet.