Evaluation Criteria
Every target is scored on 7 dimensions using a 1-5 scale. Weighted score drives the go/no-go recommendation.
Scoring Rubric
| Score | Meaning |
|---|---|
| 5 | Exceptional — best in class |
| 4 | Strong — above average, low risk |
| 3 | Average — acceptable with some concerns |
| 2 | Weak — significant issues, fixable |
| 1 | Poor — fundamental problems, likely walk-away |
Dimensions & Weights
| # | Dimension | Weight | What we score |
|---|---|---|---|
| 1 | Product | 15% | UX, features vs competitors, mobile, moderation tooling, defensibility |
| 2 | Financials | 25% | Revenue quality, growth, margins, unit economics, auditability |
| 3 | Market | 15% | TAM, CAGR, position, network effects, geographic mix |
| 4 | Team | 10% | Key person risk, retention plan, domain expertise, post-close commitment |
| 5 | Technical | 10% | Architecture, scalability, tech debt, security, compliance tooling |
| 6 | Legal & Compliance | 15% | GDPR, DSA, 2257, payment processor health, DMCA, content moderation |
| 7 | Strategic Fit | 10% | Synergies, integration cost, portfolio role, exit optionality |
Recommendation Thresholds
| Weighted Score | Recommendation |
|---|---|
| ≥ 4.0 | Strong Buy — proceed to LOI immediately |
| 3.0 – 3.9 | Conditional Buy — proceed with specific fixes in SPA |
| 2.0 – 2.9 | Pass unless fixable — only if key issues have clear resolution |
| < 2.0 | Hard Pass |
Required outputs per dimension
For each dimension, document:
- Score (1-5) with confidence (Verified/Estimated/Assumed)
- Reasoning (2-3 sentences)
- Top evidence (links, numbers, sources)
- Top risk
- What would change the score