Research the company’s management
Find out about the people running the business. Does the CEO sound like he sits on his butt all day and do nothing but collect the interest? Is management in it to make a quick buck for themselves at your expense? Make sure the people at the top actually care about investors’ needs, not just their own.
Make sure the company is unique
The business should be hard to replicate. If it’s easy to copy and ends up making a lot of money, pretty soon there will be thousands of businesses just like it! This is where the branding of the company and quality of the product become of paramount importance. If people trust the company and the product is working just fine for them, it’ll be very difficult to get them to switch.
Evaluate if the product/service is under-priced
You want to make money, not just spend it, so look for something inexpensive. This doesn’t mean ripping the other people off; it’s inexpensive for a reason. If it’s a private business, the owner may need money to expand. If it’s public, people might perceive the company to be very risky or unsuccessful for whatever reason. In this case, by putting your money in you’re actually giving the company your vote of confidence, and making it slightly more expensive.