The investment atmosphere has changed significantly in the last five years. Investment from Angels and Venture Capitalist are down across the board. While there may be many reasons for such a divide, many Investors feel this is due to the over valuations of Startups. We at Five23 agree, valuations in recent years have increased by almost 60%. Meanwhile, the frequency of successful exits has decreased by 19%. Here at Five23, we want to ensure Investors are getting the most bang for their buck, while making informed decisions about the companies they wish to invest.
Understanding the Venture
With the amount of startups seeking investment now-a-days, there are bound to be missed opportunities for Investors. On average, due diligence of a Startup by an Investor takes 134 days. With Five23, we are able to lower this number down to 81 days on average for investors. That is to say, we relieve almost 40% of the time during the due diligence process. We are able to do this by doing the initial due diligence for you. We analyze the financials of the venture, the product / service they are offering, the expected margins and do a full analysis of the startup team (among many other items). Once we have collected the data, we create a company report that gives an in depth look at each item as well as the Startup’s strengths and weaknesses. This gives you an unbiased picture of the Startup without spending valuable time researching the company.
Common Ground
The divide among Investors and Startup entrepreneurs is real. Upon a polling the investment community, only 14% of Investors agree with the initial valuation set by the Startup. We want to change this number. With every business report created, we include our three tiered valuation. We provide the Investor (and Startup) three valuations: High, Medium and Low. This gives the parties a common ground to start the investment process with the Medium valuation, and allows them to fight their corner to either lower or raise the valuation within an acceptable range. Since the valuation is done by a third party, Five23, both parties can rest assured the valuation is accurate and reasonable.
More Knowledge, Better Investments
We at Five23, understand investors have different philosophies when it comes to finding that perfect company. Whether you want more focus on the Startup’s financials or the Team behind the Startup, we want to work with you to tailor our business reports to fit your needs. We have three different packages, each with a varied degree of information to establish a baseline. From there, the sky is the limit. If you’d like to learn more about the services Five23 offers or would like to set up a call to discuss your specific investment needs, please contact us.