OTBC Start-up Assessment Checklist

The OTBC Start-up Assessment Checklist is used by OTBC in the  Investor Ready Assessment and Certification process we use with OTBC member companies.  OTBC coaches have the experience to review your start-up with respect to each item on the checklist to ensure that an objective assessment is done.  Based on the assessment results, OTBC will either certify a start-up as being Investor Ready, or work with the management team to outline an an action plan to address the areas that need to be strenghtened in order to get to Investor Ready.  The assessment is updated over time as headway is made.
 
A company that has a high rating on each of the factors listed in the assessment is very likely to be investor ready.  Why is that important?  Because based on our experience, start-ups that meet the OTBC Investor Ready criteria have a very high probability of being funded.  Start-ups who are having difficulty being funded typically are weak in one or more areas of the assessment.
 
Here's the checklist.  Each item is rated on a scale of 1 to 5.
 
1. Founder Preparation:
____ Founder cash runway at least 9 months
____ Founder life situation compatible with a start-up
____ Drive, commitment, integrity
____ Founders flexible in terms of role changes
____ Personal Vision written down
____ Concise, compelling Elevator Pitch
 
2. Target Market Definition:
____ Clear statement of compelling unmet need
____ Industry profiled (Trends; key players; Distrib.)
____ Competitive profile
____ Competitor SWOT
____ Market segmentation and prioritization
____ Market sizing
____ Customer profile
____ Future markets
 
3. Market Validation:
____ Problem/need validated
____ Why customers buy is understood
____ When customers buy is understood
____ Solution validated
____ Service/support expectations validated
____ Customer decision process understood
____ How customers find this kind of product/service is understood
____ Pricing validated
 
4. Feasibility Assessment:
____ Product - Compelling need
____ Product - Unique and protectable
____ Product - Regulatory issues understood
____ Product - Acceptable liability risk
____ Market - Defined, sized, segmented
____ Market - Initial segment chosen
____ Market - Competition has weaknesses
____ Market - Sales strategy identified
____ Financial - Enough growth potential for investors
____ Financial - Follow-on products
____ Financial - Sufficient margins
____ Legal - No complexity in business structure
____ Legal - No issues from prior employers
____ Legal - Clear IP ownership
____ Technical - Competitive tech evaluated
____ Technical - Development effort sized
____ Technical - Patent and trade secret strategy
____ Technical - Proof of concept completed
____ Technical - Customer feedback on proof of concept
____ Technical - Adoption risk assessed
____ Strategy - Disruptive innovation
____ Strategy - If sustaining innovation, compet. response
____ Strategy - Barriers to entry
____ Team - Domain experience in market
____ Team - Project sizing experience
____ Team - Core tech not outsourced
____ Team - Founders know customers
____ Team - Key additions identified
 
5. Entering and Capturing the Market:
____ Merchandising plan is developed and based on customer research
____ Sales process/funnel model understood, is in place and is being measured
____ Distribution plan in place and compatible with product/service and customer needs
____ Pricing Plan in place based on customer research
____ Customer Service Plan in place based on validated support requirements
____ All the above reflected in financial plan
 
6. Financial Plan:
____ Product/service margins analyzed and understood
____ Start-up costs understood
____ Defensible bottom-up model for first 18 months of revenue
____ 5 year financial projections
____ Assumptions clearly documented
____ Funding requirements understood based on cash flow projection
____ Credible funding strategy funding requirements
 
7. Building and Compensating Your Team:
____ Critical roles filled or planned
____ Team has experience in (and contacts in) the market
____ Compensation strategy in place and makes sense
____ Stock buy-back agreements in place
____ Board of advisors in place
____ Corporate culture actively managed
 
8. Protecting the Business and your Intellectual Property:
____ Legal business entity in place
____ No IP ownership issues
____ Employee IP assignment/NDA/Non-compete agreements in place
____ Credible IP strategy (copyrights, trademarks, trade secrets, patents)
____ IP protection policies and procedures
 
9. Working with Investors:
____ Funding strategy developed based on financial projections
____ Growth potential meets investor requirements
____ Management has realistic expectations regarding funding terms
____ Investor pitch
____ Executive summary
____ Business plan
____ Detailed financial projections
____ Assumptions underlying projections
____ One year stock option requirements analyzed and projected
____ Projected cap table developed
____ Exit strategy and exit valuation projection developed and defensible
____ Prototype completed
____ Beta release complete
____ Customer references
____ Customer revenue
____ Strategic partnerships in place
 
10. Start-up Operations:
____ Legal - Entity set up and registered with state
____ Legal - IRS employer identity number
____ Legal - County and city business licenses
____ Accounting - Business checking account
____ Accounting - Business credit card
____ Accounting - Quickbooks or other package in place
____ Accounting - Cash control procedures in place
____ Admin - Organized record keeping
____ Admin - Everyone has NDA/IP assignment/non-compete
____ Admin - Background checks on all hires
____ Admin - I-9 forms for all employees, filed separately
____ Admin - Job app. form used consistently
____ Admin - Interview guidelines developed and understood
____ Admin - Contractor vs. employee understood
____ Admin - Exempt vs. non-exempt understood
____ Admin - Policy re. supervisor/employee relationships
____ Sales - Cycle modled, tracked, measured
____ Sales - Key business metrics developed and tracked
____ Sales - Chief exec directly engaged with customers
____ Op plan - Manufacturing strategy/partners
____ Op plan - Facilities
____ Op plan - Key suppliers
____ Op plan - Operating procedures
____ Risk Analysis - Analyzed with mitigation strategies
____ Management - Over communicate
____ Management - Celebrate successes
____ Management - Hire slow, fire fast
 
11. Product Plan:
____ Features and benefits
____ Barriers to re-engineering
____ Government approvals completed
____ Technology limitations
____ Liability issues
____ Support issues
____ Product cost
____ Development partners
____ Development schedule
____ Product roadmap