The Investment Process
Entrepreneurs interested in a JumpStart investment should review this section carefully and listen to our podcast about the process. We've divided it into the four sequential sections that represent how you will progress through our investment process:
Advise – An entrepreneur completes the Advisory Request. Shortly thereafter, the entrepreneur is contacted by a JumpStart associate, who advises them of their fit with JumpStart Ventures. JumpStart seeks business ideas that have the desire and potential to attract $3-$5 million from a venture capital firm within a few years.
Apply – If a business fits with the JumpStart Ventures group’s investment criteria, it is invited to apply for an investment by submitting a 3-5 page Executive Summary. A member of the JumpStart Ventures team will work with the entrepreneur to ensure the Summary reflects a vision for growth and the potential to attract additional investment capital.
Assist – Entrepreneurs with the best Executive Summaries are invited to present to the extended JumpStart team for investment consideration. Prior to the presentation, the entrepreneur receives a month of intensive presentation assistance from a JumpStart Venture Partner. The one-hour presentation and Q&A session is intended to mirror the experience entrepreneurs might have with other equity investors.
Accelerate – Based on the presentation, if the entrepreneur is selected to continue, JumpStart Ventures conducts due diligence on the company, after which an investment is usually made. At this point, JumpStart Ventures and the entrepreneur start their ongoing partnership to accelerate the business’ growth.
If the above process isn't clear, please visit our FAQs or contact us.
JumpStart supports all entrepreneurs in Northeast Ohio through its other programs and services including IdeaCrossing, events, and communications.
We will evaluate your idea according to the criteria listed below. We ask that you to describe your idea in a concise manner — 3-5 pages.
In your written summary, please address the following:
- Product or Service - What does your company do?
- Market Need - What area of “pain” or unmet need does your product/service/technology address? Is it something customers absolutely need to have? Describe the target customer(s) and how you envision selling to them. Our preference is to find ideas with such a compelling value proposition that customers cannot live without it. Also, keep in mind that products requiring significant changes in behavior by the consumer/user are tougher sells.
- Market Size, Growth, & Segmentation - How large is the market your product/service/technology is addressing? What are the trends? Is the market growing or contracting? How quickly? Isthe market nascent or mature? Does the market logically divide into different groupings? Our preference is to look at ideas that serve large and growing markets where the entrepreneur understands the market segments.
- Competitive landscape - What is the size of the competition (revenue is one metric you could use)? Relative market share is also helpful.
- What makes your idea unique? - Is your idea protectable? If so, have you begun to seek patent protection? If not, what is your strategy for product differentiation?
- Management Team - Describe the backgrounds of the founder(s), current management team, and board members. If you haven't assembled a board of directors/advisors yet, give us an idea of your board "dream team" and specifically how or what you envision them contributing.
- Financials - What are your historical financials from a balance sheet, income statement, and cash flow standpoint? - For future financials, show us how you will reach $30-$50 million in annual revenues within five years. What volume, price, and product mix will get you there? What major expenses will you have? What will your gross margins be? What major milestones will you hit over the course of these five-year projections?
- Funding - What is your current capital structure? How much has been invested in your business to-date? How much funding are you seeking, from whom, how long will it last, and how will it be used?
- Exit Strategy - It is never too early to start thinking about potential exit strategies for your business. Tell us who might be interested in buying this company in the next five years. Or do you have dreams of taking your company public? Investors need assurance that they will be able to achieve a return on their investment at a future date, ideally within five years.