Five23’s goal since day one is to make it easier for startups to raise money. From the day you start to when you are ready for an IPO, we want you to have a good understanding of what your company is worth. Whether your starting to look for funding, entering your Series ‘B’ or finally ready to accept that acquisition. We want to make sure you understand how much you are worth. We calculate your valuation, analyze and vet your core team, collect related market data, do an in depth business analysis and report back to you. We even white-list your company, making it even easier to show investors you are worth it.
The first step in the process is to gather all of the necessary information on your company. When doing any sort of calculation having solid data to calculate from is key, this is no different. Five23 is mostly focused on collecting financial information, including Projections, Margins, P&Ls, Historical Data, etc. There are other documents that will help in the calculation process, such as Employee Contracts, Incorporation Documents, etc. (to view the full list of data, please click here). This task is the most vital to a successful calculation. Every great startup has a great plan and an even better financial one. We at Five23 understand it is hard to predict the future, but we ask companies to try their best to be realistic with their projections.
Once the data has been gathered on the business aspect of the company, we start looking at the team. With all of our packages ,the core team of the company is to do a stress survey. This will allow Five23 to have a good understanding of the team behind the project. Whether the company with its current core members can stand up to the stress of operating a highly successful business. If you purchase one of the more in depth packages (Growth Hacker & Master Class), we will have our team vet the core members. The goal of this process is to find anything that may hinder the company as it grows. This will include an interview to once again obtain stress and work related proficiency, a detailed background check in regards to criminal offenses, and finally work related background checks to ensure the team member is up to the challenge. The company may choose to opt out of any of the team member related items, however it is recommended to guarantee accuracy of Five23’s services. The findings from this data are used in the valuation calculation. It is important to keep in mind that 80% of the decision to invest is made on the team. It could be a a great company only looking at the numbers, but if the team is not up to the challenge, it will be hard to find investment. The goal of Five23 is to find theses ‘flaws’ before investors do. That way you can make necessary corrections to the issues.
One of the first questions investors ask you is, “How much is your valuation?”. That’s the question Five23 answers. You’ll be able to sit down with the investor and say with confidence, “My company is worth ‘X’”. You can do this, because we do it for you.
The third part in the process is the calculation. This part is all on Five23. We use the previously collected data to calculate your valuation, along with the pros and cons of the business model, strengths and weaknesses of the company and core team members. When calculating the valuation, we take the figures you have provided and use our highly accurate algorithms to factor out a number. It is then weighted, based on the core team of company, the related market data, the startup / business atmosphere in your location and many many more items. Once the thousands of algorithms have been ran, we have a clear picture of what your company is worth. Upon completion, we give your three valuations, a High, Medium and Low. These three valuations will give you a great understanding of what your company is worth on the High, Medium and Low side with the Medium valuation being Five23’s recommendation. Using these figures, you can decide what one best fits your needs as you move through the investment series.
Once all the calculations and evaluations are done, Five23 creates an in depth company report. This report includes: The Valuation Calculation, Business Analysis, Market Strengths and Weaknesses, Team Pros and Cons, Suggestions on how to improve, etc. With this report you are armed when talking with investors. It will give you a great understanding of where you are, what you’re worth and why. It will show your company’s shortcomings as well as your greatest assets. It will give your suggestions how to improve and paths to get there. It will greatly increase your confidence on what you have built and show you the way to the next level.
White-Listing is the bonus stage of the process, while it is only available with the ‘Growth Hacker’ and ‘Master Class’ packages, it is highly recommended. Think of if as Five23 giving your company a seal of approval. This will act as a fast track to investment and/or sale. It will show investors your company has made it through our rigorous valuation process and is ready for investment. We have marked the company as clean, ensuring there are no business-harming issues. The goals of the company are attainable and realistic based on previous data. By white-listing the startup or company, you give the founders a much better chance of succeeding during their funding round and give investors that piece of mind they need. Thus allowing the company to raise money faster and/or sell the company quicker.
Becoming white-listed is harder than you may think. Your company must have passed all of Five23’s requirements in regards to your projections, team members and goals. Realistic is the underlying theme. You must have a detailed path of achieving the task in front of you. Without a road map, your company will not be white-listed. This process is very similar to a due-diligence process an investor would do.
This White-listing process is what separates Five23 from our competitors. It gives your company a no-risk opportunity to go through an investors vetting process. If there is an issue found, we’ll let you know and allow you to fix it. This allows your company to become investment ready before it’s too late.