What are the odds that your product will work and you’ll receive an investment? Innovesta knows how to answer that.
Israeli Innovesta wants to make the due diligence of early stage companies a more accessible, reliable and useful process, while minimizing risks for investors and assisting entrepreneurs checking the grounds before they’re taking off.
The Israeli start-up Innovesta develops a platform that enables investors and entrepreneurs to perform due diligence on early-stage products and companies through the wisdom of relevant crowds. The process of due diligence, as it’s done today, is very long and includes a lot of ‘back and forth’ of more questions and answers, more analyst’s and expert’s opinion, etc., etc. Also, most of the times what happens is that an investor turns to an analyst who will investigate the market and category of that venture, and find everything that can be found online. However, the final report will never be contextual to the start-up itself, since there are slight chances of finding an identical startup to the one I’m interesting of investing in.
“In Innovesta we believe that the knowledge will never belong to just one expert, not even to three. Beyond that, the definition of “expert” has to change. Experts are not only paid consultants, experts are all those people who can be consumers and customers of the new company, those who can be users of a product, an application or an interface, and generally people who have a direct or indirect connection to the field of the new venture. Such experts, or “Opinion Leaders” as they are called in Innovesta, if they are put into the right room (virtual room), being presented with the right data, being asked the right questions and being allowed to conduct deep discussions with the entrepreneur, may provide the investor a very comprehensive picture about the market, the competition, the idea and even about the team”, Co-Founder Keren Kay explains.
The new experts
The idea behind Innovesta is to bring together in one virtual room the ‘new experts’, people who have knowledge and experience in all angels – investors, entrepreneurs, users or even people who have worked in the same niche companies as the start-up. “If I bring into a room people from different angles of this company and ask the right questions and allow an investor to have contextual discussions with them, I can get a picture and insights which were created in this room in a special, specific adapted way”, said Kay. The virtual space allows Innovesta to bring people from different geographies and verticals.
Every time a new project is uploaded to the platform (whether by an investor or directly by the entrepreneur), Innovesta opens a new CDR™ – Crowd Diligence Room. The same entrepreneur whose start-up is being reviewed and is at the center of the stage will be asked to upload all the material he has on the venture – from presentations to one pager to a web-site link, video or demo, every available material that allows you to get the idea or the product. Also, in the initial stage and even before the room is opened to the public, the entrepreneur and the investor will be asked to create a list of relevant subjects they would like to discuss.
The technology the company developed knows to bring the most suitable Opinion Leaders to each CDR™. To a CDR™ that examines a venture related to the medical world, for instance, will arrive patients, patients’ families, nurses and medical staff. That room remains private and closed, and only those who received an invitation are allowed to enter it. The minimum participants number in a room is 30, it can get up to 100 or 200 people.
The CDR™ is the space where new insights are being created
The CDR™ has all the media and information the entrepreneurs uploaded, as well as discussions held under different categories. It’s an online platform, but it’s not taking place live. In order to stay updated there’s a notification system that alerts whenever a new comment is received or an interesting discussion is opened. “The only thing we have live is a live session – where we allow the entrepreneur to go on a live video. Anyone in the room can ask the entrepreneur questions and get the answers live”, kay added.
The product is intended for a number of key audiences: investors regularly looking for early stages companies to invest in – private investors (angels), groups of private investors (Angels Clubs), VC’s, accelerators, incubators, family offices and online equity crowd funding platforms.
It’s also relevant for companies and corporations looking for innovations and technologies, as well as entrepreneurs who want to examine an idea and have an opinion about their company / product / presentation before approaching investors.
In this way, for example, you can ask the participants if they would pay 100$ for this product. Those who answered yes – excellent, but it’s more interesting to examine those who answered no. Would they pay 80$?
The investor can raise closed yes/no questions, rating (how much would you recommend this to a friend), as well as open ended questions. An opinion leader can also open a discussion by asking a question.
“We are an investors’ tool, but we’re also a great tool as a direct channel to entrepreneurs,” for example, an entrepreneur can open a CDR™ to receive feedback from the audience. It can be feedback on the product or the presentation itself (it can be a great idea but it’s not presented well).
The Innovesta community of Opinion Leaders attracts thousands from around the world
This platform approaches to people who like innovation, who want to share their knowledge and in exchange be the first to get exposed to new things. “The broadened answer is that the regulation in the US has changes a year ago, and it allows everyone today to invest in equity on-line. It means that a lot of new potential money is coming in, but for people who have no experience. They know about this scene, but they don’t really know it and know what to ask. For people like these to be an active fly on the wall is priceless; They understand what investors ask and what they need to know, and they get the ability to get into investors’ heads, and understand what is needed”, Kay explained us.
Innovesta’s differentiation, and its obvious advantage, is examining each project in a specific and contextual manner, and gathering new insights created in the platform itself. The wisdom of the relevant Opinion Leaders provides a wide range of reactions and insights, which provide greater value than that of a single analyst or consultant. The combination of different people in the room brings a comprehensive in-depth perspective on the product, the company, the competition and the team.
The company’s business model is based on renting the CDR’s. At the moment, the pricing is 750$-2000$ per room, according to various parameters. The company also offers plans for business customers (VC’s, angel clubs), who pay for a monthly subscription and are given the opportunity to open CDR’s as they wish.
The company was founded in January 2017 by three founding partners: Hanna Rado, Yahli Harari (CEO) and Keren Kay (Marketing Manager). The development and technology work is led by Zohar Guy.
Source: GeekTime, October 2017