Your firm has been asked to invest in a new, early stage firm. The firm is in a brand new industry and, although the firm is still in its early stages, it believes it has a very promising new product. Other new firms are also in this industry and also have their own new products. At this stage, long term demand for products in this industry are expected to be strong. You have been asked to evaluate this situation for your firm before they make any investment.

What are your recommendations and why?