The first, and most important, consideration when looking at an opportunity is its business model. This can be attributed to a simple observation: the business model dictates how a company makes money. As such, the business model is also the one consideration that you will be most likely to have at your disposal, as an individual or organization listing an investment on a platform needs to validate the opportunity by illustrating potential paths to profitability or demonstrating real traction. That said, try to dig deeper and understand any other underlying avenues of growth that could be made possible by a given operating model – for instance, a consumer design platform may be able to grow by not just selling illustration software, but also by cross-selling supplemental offerings such as professional printing or a template library.
Please be sure to also take note of key relationships or competitors that investors should be aware of. Some business models are predicated on one or two close relationships with strategic partners, distribution channels, or clients, which comes with the associated risk of fast failure in the case of a relationship faltering. Additionally, certain businesses exist solely because of the negligence of others – competitors who could enter a market but have either chosen not to or haven’t considered doing so yet. In these cases, please note key competitors and their capabilities / ability to execute.
