A start-up must fulfil the 3 following criteria before you should even consider to take a stake in this new company. The 3 point checklist is simple but the basis for successful investing.
1.) Significant total addressable market (TAM)
2.) Novel, unique product
3.) Impressive Leadership
If only one thing can not be checked off, then move on. There are better places for your money, especially right now while the start-up market is hot. There is no need to compromise.
Sven Franssen