Gregg Bennett, Charles Finkelstein, Brad Harlow, Byron McCann, Peter Ueberroth

At the Zino Zillionaire angel panel on September 15, 2010, Byron McCann, Managing Partner, of Ascent Partners Group, offered a way to look at and filter potential angel investments using a mnemonic he calls “TORQUE”. There has to be a balance in an emerging venture across capabilities. Only technology and not enough product could be a critical imbalance. “When you torque a nut on a bolt, you have to have the right amount of torque – not enough, it will come loose and fail to do its job, and too much, it will strip the threads and become useless entirely,” said McCann. “A venture needs a good balance of many factors and TORQUE is one easy way to begin looking at it from both the entrepreneur’s and investor’s points of view.

TRACTION – Do potential customers really want the specific value proposition the venture is offering? How’s that validated?
OPPORTUNITY – Is this a big enough and interesting enough market to make worthwhile all the effort to build the venture?
RELATIONSHIP – Is this a group of entrepreneurs you want to work with over the life of the investment? Is there trust? Will you be able to collaborate and have open communication?
QUALITY – Do the entrepreneurs focus on doing the right things the right way? Do they have a quality mindset? Will they do a process or task well or just be expedient?
UNIQUE – Is this unique enough to be differentiated in the market, solve the problem well, and defend against competition? Is there solid intellectual property?
EXECUTION – Can the team focus and operate the business with intensity and excellence to help customers and build value?

While there are many other considerations to employ in evaluating an emerging venture, this is a good start to filter down the ones worth spending time investigating further. Angel investing and emerging ventures are exciting and have the chance to make a worthy impact for many. Focusing on the right ones is a key step in this invigorating but often challenging process. Good luck!

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