Success is about wise investments. A person can invest time, talent and/or money, with the intention to
increase future performance, income or assets.
Other than inheritance, the only way to create wealth is to invest. Even winning the lottery is the result of
an investment – of course a highly speculative and risky one!

The private sector not only represents by far the largest portion of the economy, but also promises more
rewards for investments. That is also where Angel Investors, Venture Capital and Private Equity firms can
contribute the most.

For all practical purposes an investment opportunity can be viewed as a machine that consumes certain
resources, and produces a return within a timeline while carrying certain risk.

Opportunity

This general model applies to all investments in the private sector, or ventures, as outlined in this essay.
The investment may be made with an expected return of growth or cash flow. The valuation increase in
the above diagram symbolizes the growth of the investment.

The time lapse between resource consumption and returns depends on industry, company strategy and
stage of development.

In a perfect world an investor would ask only three questions for making an investment decision:

How much do you need? (Capital Requirement)
What is the payback? (Rate of Return)
In what format and time frame? (Deal Structure, Exit)

However, in the imperfect world we live in, investors have experienced or heard of cases where investments haven’t produced the promises. So they now have to quantify the risk by asking questions such as:

What do you want to do? (Idea, Business Model)
How do you want to do it? (Execution Plan)

And that is where all the complexity of selection begins