Investment Criteria
Scenario Summary In this scenario you are the Vice President for Johnson Angel Investments, LLC and assistant to an angel investor, Joe Johnson, CEO Johnson Angel Investments, LLC. Joe Johnson made his fortune in the Internet space. He was an executive for a company that went public and he cashed in his options and is now worth over $100 million. Mr. Johnson is young and does not want to retire, but he also does not want to start his own business, so he wants to evaluate business plans and determine which ones to invest and which ones to leave behind.
You will assist Mr. Johnson and Ms. Samantha Smith, CFO Johnson Angel Investments, LLC. in creating his investment criteria that will be posted on the Johnson Angel Investment, LLC website.
Your Role/Assignment You are the Vice President for Johnson Angel Investments, LLC. You have been hired by Mr. Johnson to help select investments and determine viability of business ideas.
Key Players Ms. Samantha Smith, CFO Johnson Angel Investments, LLC - I am the Chief Financial Officer and responsible for the finance for Mr. Johnson- organization. In addition to the mission, the investments must show great promise for return. If the investment does not have the upside of 10% or higher, we are simply not interested. Mr. Johnson also has a maximum he is willing to invest. Anything over $250,000, he will need additional angels before he will invest in the entrepreneur- idea. And one more thing, Johnson Angels will not invest in the early stages of a business. If the concept is not proven, and if they don’t have more than $100,000 a year in sales, we will not invest.
Mr. Joe Johnson, CEO Johnson Angel Investments, LLC - Thanks Samantha. She has been with my company for several years; however, I hired you to help me create criteria for investing. Our mission at Johnson Angel Investments is to create a portfolio of new age companies that represent the technologies of tomorrow. We want these to be well managed and the concepts to be proven. I believe that ROI is important; I don’t want to risk my money for a small return. I also want the company to be local and I want to be able to visit my investment operations from time to time. If it is a good idea and has minimal risk and great upside, but the capital requirements are very high, I will be more than happy to invest with other investors. Be sure the website does not scare away larger capital intensive business ideas. As you know, all of these issues we have chatted about today are critical, but I am sure you are aware of other ideas and criteria that we should thinking about to ensure our portfolio is strong. Please develop your proposal and submit it to me as soon as possible. I look forward to your ideas and creativity. Create investment criteria for Mr. Johnson that will outline what his company will be willing to evaluate for investing. The criteria will be created by you, which will be posted on the website to be seen by entrepreneurs.
Here are some examples of criteria, but not limited to the following.
Development Stage: What stage does your investor prefer (concept, idea, break-even)? Geographic Location: Location the investor prefers.
Industry: The industry your investor prefers.
Revenue: Outline the level of profit you want the company to show.
Return on Investor (ROI) Desired: The amount of ROI you desire.
Technology Focus: The focus of the entrepreneurs' technology (i.e., biomedical, Internet, etc.). Management: Level of experience you desire from the management team.
Sustainable Competitive Advantage: A demonstration of the competitive advantage.
Exit Strategy: The exit strategy your investor prefers. Size of Market: The size of the marketplace that you prefer.
Size of Investment: The range of the investment your investor is willing to disperse.
Proof of Concept: A list of sales and a prototype required.
Your proposal should be 2-3 pages in length with a detailed list of your criteria and explanations for the criteria
USA 
India