Today’s private equity realm is dominated by M&A, CVC, and syndicated angels interested in early-stage promising startups. A data-driven algorithmic approach is preferred by new players rather than outdated gut feeling and manual screening. Many unicorn businesses failed during the recent private equity boom, and investors had unmet expectations about technology profitability itself. Due to these facts, it became evident how difficult it was to scale up unprofitable businesses, and how vital it is to embed technology into successful business models.
One more insight was the concept of intangible assets (IAs), which turned out to be a blessing in disguise. Investing in IAs carries additional returns and holds more potential for growth in the future due to their distinctive features:
With the advent of the intangible revolution, market entry was lowered and startups proliferated (new startups were founded every day). It is estimated that investors spend up to 20% of their time bringing startups to the table. The statistics portray a disappointing picture of sourcing and screening: of a hundred startups selected, only one was funded. Clearly, an extensive approach has exhausted its potential, so the funnel needs to be narrowed to get startups fit for funding.
Anticipating investor preferences, PROFIT makes startups fit for funding by employing a set of tools and a hybrid intelligence approach:
Finally, investors who partner with PROFIT receive the Startup Roadmap, summarizing 12 points of the fundraising journey along with a full Pitch Deck. Moreover, they will receive quality follow-up information for due diligence. Investors can see their preferences and terms reasonably satisfied by aligning interests with founders.
Through a well-defined process, PROFIT transforms input data into quality information for decision-making. As you shape your funding funnel, you will go from a brief presentation card to a full pitch deck and to follow-up information for due diligence.