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Yogyakarta Investment Club

How to evaluate a startup before you invest

A practical checklist for early-stage investors: the team, the market, the product, the numbers and the deal terms, and the questions worth asking in every pitch.

Updated 2026-10-25

Start with the team

At the earliest stage there is little else to judge. Ask why this team is the right one to solve this problem, how long they have worked together, what they have already built, and whether they respond well to hard questions.

The problem and the market

Check that the problem is real and that people already pay, or clearly would pay, to solve it. Then ask how large the market could become. A market too small cannot produce the return that early-stage risk calls for.

Evidence of traction

Look for evidence over promises: paying customers, repeat usage, signed pilots, or a waiting list that converts. Ask how customers were found and what it cost, and whether the same approach will work at a larger scale.

Read the numbers

You do not need a complex model. Understand how much the company earns and spends each month, how long its cash lasts, what it will use your money for, and what it expects to achieve before it needs to raise again.

Valuation and terms

Early-stage valuation is more judgement than formula. Compare with similar companies at the same stage, and make sure the price still leaves room for a good return if the company succeeds. Read the terms as carefully as the price: what rights you get, what happens in later rounds, and how you could be diluted.

Practise on real companies

The skill improves with repetition. The club's Deal Room lets members hear pitches from screened companies, ask hard questions and discuss the deal with other members afterwards, with no pressure to invest.

This guide is general education. It is not investment, legal or tax advice, and early-stage investing carries a high risk of loss.

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