I just ran across this article that was posted on Reuters back in early October called The Secrets to Getting Your Green Business Funded. It’s a question and answer session with venture capitalist Bryan Korba and he offers a perspective from the other side of the desk on talking with the institutional investor. In particular I liked his items, which I’ve placed below, that are red flags that turn off investors:
1. Closed-minded entrepreneurs.
2. No real startup experience.
3. Need to spend millions of dollars to generate insignificant revenue.
4. The company has no model to generate revenue (it's customers, not buzz, that generates revenue).
5. The company can show no operational roadmap on how to build and manage the required business processes (sales, accounting, customer service, quality control, etc.).
6. Unrealistic valuation of the company.
7. Entrepreneurs that try to control everything.
8. Trying to raise money instead of building a business