Screening Criteria – the Product

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In screening startups for funding, here are the key criteria for vetting the product:

Solve a real problem.

The product solves a problem that is big enough that customers will pay for it.

It helps if customers will pay good money for it.

Traction.

The product has enough traction in the market to prove it works for the customer.

This should be growing month over month.

Core monetization.

There's enough revenue coming from one core source to build on.

Ancillary revenue streams can come later.

Business model.

The business model generates enough revenue to cover the cost of customer acquisition.

The CAC:LTV ratio should be at least 1:3.

Cost to build.

There's a process in place to build and support the product.

There's a system in place to continue building the product and growing the revenue.

Lead generation.

There's a system in place to generate leads that turn into sales.

The conversion rate is known and improving.

Use these criteria to vet the product.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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