Would you invest in these guys?

A friend of mine has just shown me some packaging designs for a new chocolate product she is developing: it’s actually healthy for you, the more you eat, the better you feel and the better it is for you. Sounds pretty cool (i haven’t had a sample yet!). She asked me “is this business invest-able?”. Well, the answer involves the usual suspects when it comes to this type of thing. It doesnt matter whether you’re talking chocolate or tennis balls, the same principles apply.

Here are the ten questions an investor will want answered:

• Do you have sales and distribution (e.g. orders in hand from a big retailer or predictable and scalable sales direct to consumers – like online)?
• Show me evidence that people love your chocolates and why?
• How am I going to make money out of the deal (sale of the company, return on investment etc)?
• What’s the competition like and what makes you different?
• What’s stops someone else copying you and killing your market?
• What’s the management team like – I’ll back the horse, not the jockey?
• How much money do you need now i.e. i want to make sure that my money is safe and you don’t run out of cash quickly so I lose my investment?
• How much money do you need to be profitable?
• (helps but not essential) = i’ve gotta love chocolate i.e. i just love your product personally?
• How many Umpa Lumpas do you have on staff?