How Retail Investors Can Research Early-Stage Companies in 15 Minutes
Guest post by Invest Deeptech. | Originally published on Invest Deeptech.
In a flash: Early-stage companies offer retail investors the chance to access high-growth opportunities before they hit the mainstream. But evaluating these ventures can be tricky without a clear strategy. In just 15 minutes, you can gather the key insights needed to assess a company’s potential and make smarter investment decisions. Here’s a practical guide tailored to retail investors.
Explore our earlier articles on this topic 👇
“Key Deeptech Investment Metrics by Stage for Retail Investors (Part 1)” - What Retail Investors Should Know
“Key Deeptech Investment Metrics by Sector for Retail Investors (Part 2)” - What Retail Investors Should know
“The Retail Investor's Roadmap for Deeptech Investment Metrics” (Part 3) - Build Your Deeptech Investment Evaluation Framework
🕵️♂️ Understand the Company at a Glance (3 Minutes)
Start by gathering the basics to determine if the company aligns with your investment goals.
Visit the Website: Check the company’s homepage to understand their mission, products, and target market.
Example: A biotech startup may highlight its focus on innovative cancer treatments.
Key Questions to Ask:
What problem is the company solving?
Is the solution innovative or unique?
Practical Tip: Look for clear, compelling descriptions of the business model.
👩💼Research the Founding Team (3 Minutes)
The success of early-stage companies often depends on the team’s expertise and vision.
LinkedIn Check: Search for the founders and key team members to assess their experience, education, and past successes.
Example: Has the CEO led a previous successful startup?
Red Flags to Watch:
Lack of relevant industry experience.
Frequent changes in leadership positions.
📈 Analyze the Market Potential (4 Minutes)
Understanding the market size and growth potential is critical.
Quick Google Search: Look up reports or articles about the company’s industry. Use terms like “market size for [sector]” or “[sector] growth projections.”
Example: A renewable energy startup might operate in a solar panel market projected to grow by 20% annually.
Look for Trends:
Is the sector expanding?
Are competitors entering or exiting?
📊 Assess Funding and Financial Health (3 Minutes)
Funding is a key indicator of the company’s validation and growth prospects.
Check Crunchbase or AngelList: Review funding rounds, investors, and partnerships.
Example: If a deeptech startup has secured funding from a reputable venture fund, it signals credibility.
Look for Milestones:
Have they hit funding targets?
Are they actively raising funds for growth?
🗣️ Gauge Public Perception (2 Minutes)
Public sentiment can reveal early feedback and traction.
Social Media and Reviews: Look for mentions of the company on platforms like Twitter, LinkedIn, or forums like Reddit.
Customer Feedback: Search for testimonials or early reviews.
Example: A SaaS startup with glowing user feedback is more promising than one with complaints about usability.
Practical Tools to Use
Crunchbase: Comprehensive data on startups, funding rounds, and investors.
LinkedIn: Research founding teams and employees.
Google Trends: Gauge public interest in the company or sector.
PitchBook: Insights into private companies and their performance.
AngelList: Discover early-stage companies and their focus areas.
Dive deeper in our earlier article 👇
“Mastering Deeptech: 13 Essential Tools for Savvy Retail Investors”
Key Benefits for Retail Investors 🤑
Spot Early Opportunities: Access startups before they scale, maximizing growth potential.
Make Informed Decisions: Reduce guesswork by quickly identifying promising ventures.
Minimize Risks: Avoid companies with red flags by focusing on fundamentals.
⏱️ Maximize Your 15 Minutes
Researching early-stage companies doesn’t have to be overwhelming. By focusing on the company’s overview, team, market potential, funding, and public perception, retail investors can quickly assess whether a startup aligns with their investment strategy. With tools like Crunchbase and LinkedIn, you’ll be equipped to confidently navigate the startup landscape and make smarter investment decisions.
