Gust’s New Startup Evaluation and Feedback Engine Provides Valuable Feedback For Startup Founders.
Just yesterday we reported on Collision Conference featured startup CrowdSmart a company that’s using artificial intelligence and crowdsourced, evaluator feedback to help mitigate risk and evaluate the investment potential in early stage startup companies.
Earlier this week, Gust, the world’s largest global platform connecting high-growth startups and active early-stage investors launched a startup evaluation & feedback engine, a free tool that analyzes a startup’s key metrics to instantly provide an estimation of investment potential and suggestions for improving the business’s appeal to investors. Founders can use the tool to hone their pitch decks and set realistic expectations for their startups in order to become a more informed, attractive prospect for investors.
The engine analyzes a wide range of self-reported information about a startup, including its business model, fundraising history, team composition, revenue, personal investment, traction, and more. The engine then uses a unique algorithm to provide founders with detailed, granular feedback using historical metrics collected from years of investment deals, 409a valuations, and accelerator acceptance rates.
“Gust is dedicated to arming founders with innovative tools to help their businesses succeed. With extensive experience vetting startups and evaluating potential, our goal is to provide early-stage startups with context, expertise, and useful tools to grow and seek investment,” said David S. Rose, CEO of Gust and author of the New York Times bestseller, The Startup Checklist: 25 Steps to a Scalable, High-Growth Business. “With our new startup evaluation & feedback engine, we can now help founders better prepare for investment conversations by providing the feedback needed to put their best foot forward when it counts.”
Among founders who have used the tool, response has been very positive. “Feedback from this tool helped me identify specific areas of improvement needed before I started pitching to investors,” explained Jerome Reyes, Owner of Certifly. “I have since brought on several executive members that better round out our leadership team. This has made all the difference with investors and their eagerness to more confidently move forward with Certifly.”
The engine analyzes the relative strength of the team and the milestones achieved and produces a confidence band regarding the probability of various levels of investors (angels, micro VCs), as well as how much the founding team should expect to raise. Additionally, it provides company-specific feedback as to how the founding team can improve its probability of raising additional capital by assessing the venture’s strengths and weaknesses.
Data collected from over 6,000 users in a beta test of the tool found that investor confidence and attraction to a business prospect is often predictable. For example, the tool’s data shows that startups with two co-founders have raised four times as much on average from professional investors than startups with one co-founder, and that startups with four co-founders had raised almost twenty times as much from investors as sole founders had, suggesting that the success of a startup relates highly to the composition of its founding team members. Another trend identified using data from the tool suggests that founders with previous startup success are more attractive to investors than first-timers – the data shows that the number of founders with prior successful exits on a team correlates with higher average revenue generated by the startup in the past year. Additional trends pulled from the beta test can be found in the report Pitch Perfect: Using Data to Give Startup Founders Fundraising Feedback.
To evaluate your venture with Gust’s startup evaluation & feedback engine and receive valuable investor feedback, visit gust.com/startup_evaluation.