Sprint Background

The initial problem statement came as a shared spark between founders Eliot Chang and Sara Anani. They hypothesized that pre-seed entrepreneurs struggle to gain high calibre, concise, transparent and consistent feedback on the overall “viability” of their startups in readiness for investment. My team was brought onboard for the discovery phase, researching competitors and users to see if there was a ready market. We also refined the problem statement for each persona we created and validated it with our research findings.

Is this idea viable?

Discover

User Research & Interviews

The startup community has witnessed explosive growth recently, with more than 100 million startups launched every year (Global Entrepreneurship Monitor). Entrepreneurship is way up, but funding is way down. Investors are relying more heavily on AI (artificial intelligence) and statistical models to help them predict the success of startups , making it more difficult for startups to understand how they are being assessed. Big name VC (venture capitalist) funds are also starting to invest in startups during earlier and earlier fundraising rounds, making it difficult for angel investors to attract startups.

We searched and recruited startups founders who were in a very specific place of funding. They had to have pitched to an investor at least once and raised no more than seed funding. We wondered what founders found lacking in their interactions with investors and the painpoints they experienced as a seed/pre-seed company.

Investors were recruited more loosely, ranging from angels who only had 1 or 2 companies under their belt to managers at VC firms who managed upwards of $50 million for their clients. We explored the different methods these individuals and companies used to assess startups and the different qualities they looked for in founders and teams.

Research Synthesis

Affinity Map: Investors

Below are close-up images taken of the affinity map that was created from interviews with investors. We talked to a variety of investors who had one thing in common: they are all currently invested in technology startup(s).

Insights

1) Investors look for teams that work well with each other. It doesn’t matter how cool the technology/product is, if the team doesn’t function, investors aren’t interested. In other words, investors invest in people.

2) Investors look for the “right team”. Everyone we spoke with had a different metric for measuring “right-ness”, so it was up to us to determine how to standardize this.

3) Investors won’t invest in inexperienced founders. Most looked for a veteran within the founding team, regardless if he/she is the CEO, CFO, CIO, etc.

Affinity Map: Founder

These images are those of the affinity map created from the founder interviews. From the I-statements we extrapolated, these are the needs and pain points we saw they all had in common.

Insights:

1) Founders are usually unsure where to start, and need access to experienced people. Successful veterans of the startup scene are not easy to come by.

2) Friction is not necessarily a bad thing. As long as there is a willingness to listen and work things out respectfully, founders welcome a challenge to their perspective.

3) Founders are eager to learn from their mistakes and improve their products and their pitches. Although they seek feedback from their failed meetings and pitches, investors are not as readily available to provide the constructive criticism they need.

Define

Personas

From the raw data we gathered, 4 personas emerged. James the Founder, Angela the Novice Angel Investor, Keith the Experienced Angel Investor, and Greg the VC Manager. They each had unique goals and pain points which were revealed during the affinity mapping. With our personas giving us a clearer insight into each of our potential users, we knew James and Angela needed the most help and were the least likely to get it aside from experience.

James the Founder

James is a young and passionate entrepreneur who is utterly convinced of the world’s need for his product. However, being a rookie founder, he has a lot to learn, most of it through experience which will cost him time and money. He just needs someone to believe in him as much as he believes in his product. If he had a way of knowing exactly what investors are looking for, he would know how to tailer his pitch and himself to inspire them to invest.

He finds that getting objective critique on his pitch from actual investors is difficult, and that is preventing him from improving as fast as he is able. Even though he is open to constructive criticism, no one is giving him any.

Angela the Novice Investor

Angela is smart, ambitious and adventurous. However, when it comes to investing she is inexperienced and green. She has invested in one startup that sounded very promising at the pitch but has not been taking off in the way that she expected. Understanding risk and loss is one thing but actually experiencing it is very stressful and frustrating. Although the experience has not discouraged her from investing, it has taught her to be more cautious. More importantly, it has revealed that she doesn’t know how to ask the important questions and how to spot the red flags early on. So far, she has depended heavily on other’s recommendations but she wants to be able to rely on her own judgement. Angela’s biggest goal is to make a profitable and safe investment.

Problem Statements

Next Steps

As data driven as we might want to be, especially when it comes to making important decisions, there is no replacing the gut feeling. People invest in people. The best way we can help James is to make him someone in whom Greg or Keith would want to trust their money. Starting up a business is always going to be risky and difficult, but that shouldn’t stop genuinely great ideas and products from reaching everyone.