Want To Invest In Early Stage Ventures?

MEDIA RELEASE

Tuesday 8 September

Want to Invest in Early Stage Ventures?

Ten Points to Consider by James Claridge

Investors considering a foray into the speculative but potentially lucrative start-up/early stage sector should consider the following key points.

James Claridge serves as a sponsoring member with Alchemy Equities. James has over 20 years experience in risk management, business valuation and actuarial activity.

1) Does the product really offer customers what is claimed? If the Share Offer document does not provide sufficient evidence of product effectiveness, ask the company for more evidence.

2) Assess the demand for the product. Will the product generate significant, long-term revenue growth? Or will it be a fad, with demand drying-up before adequate returns on investment are made?

3) Check out the Executive and Board. Do they have the collective experience and expertise to deliver the product to market and handle operational constraints that most early-stage companies face?

4) Review the business model, including branding, marketing, supply chain, distribution, customers and pricing. Ensure the company is clear about its target market and distribution method.

5) Identify the key risks facing the company. Does the company exhibit basic corporate governance, compliance and risk management awareness? Have key risks been addressed?

6) Review the competitive advantage of the company, the competitor analysis and barriers to entry. Is Intellectual Property protected?

7) Is the company continuing with product development? This is important as it allows the company to leverage of its initial product and to create an ongoing, diversified revenue stream.

8) Review the balance sheet, P&L accounts and forecasts. Start-ups should not be carrying debt, excessively remunerating directors/founders with cash or spending money extravagantly.

9) Talk to the founders and directors and ask them tough questions based on your assessment of the companyfs Share Offer. Lack of cooperation may indicate an unhealthy attitude to shareholders generally.

10) Review the financial forecasts and the valuation of the company. Do your own, simple, projection model and test profitability using conservative assumptions. If you donft have the expertise to do this yourself, get some help.

These points are drawn from personal experience and should not be construed as financial advice.

Alchemy Equities is mounting a Becoming Investor Ready program with the NSW Department of Industry and Investment - the application deadline for the program is 14 September.

http://www.alchemyequities.com.au

For further information contact:

Brianna Power - Affinity Marketing
[email protected]
0403 904 912

SOURCE: Alchemy Equities