Can We Make The Startup System Fairer? Floww Bets Yes
The pandemic has catalysed the boom in startup creations. In the third quarter of 2020, the US reported 1.6 million new business applications – up 86% from a year earlier. Lockdown has been an incubation period for founders’ creative juices to flow. With such a large number of new businesses, there’s naturally a greater demand for funding, and fast. Whilst exciting opportunities are sure to be found, finding them remains an unstable search. As the start-up market becomes more saturated, investors are faced with more of both good and bad investment opportunities. It’s now more difficult to separate the scalable unicorn startups from the money sponges.
A Failing Approach?
From a start-up perspective, it’s all about who you know and how you know them. Connections are key to growing any business. Lack of connections means a lack of investment – a one-way train to bankruptcy. This simply means that those who know the right people go further, and truly great ideas can slip through the net. But what if you don’t know anybody at all? It can be so difficult to know how to pitch your startup in the best light when your access to mentors and angel investors is next to zero.
But the investor doesn’t have an easy job either. When a business is in its infancy it’s incredibly difficult to judge not only their potential, but also their current success. Most investors will only part ways with their funds when they feel truly confident in the startup delivering a return or substantial growth. Yet what determines this confidence is often intuition and feeling, not always data and hard facts.
Current operations are often clouded by start-up costs and temporary hurdles. Spotting a viable investment opportunity can feel like a stab in the dark. Current solutions like Pitchbook, though comprehensive in company insights, are not always real-time in updates, nor always straight from source. This affects the ability to make time-sensitive judgements on a startup’s potential and prevents meaningful evaluations during due diligence processes.
Given this, the investor harbours immense personal risk. No doubt, there will always be risk in venture capital but the inability to make accurate evaluations of the startup potential amplifies all risks to a new height; wouldn’t you want to be sure beyond reasonable doubt that you are making the right decision based on clean data?
The Power of Reliable Data
Data can remove the uncertainty that often goes into decision making. Executives have historically been hostile towards data because of a lack of personality and difficulty to be interpreted. Data lacks responsibility right? If something goes against data predictions there’s no one to really blame.
But this feeling is misplaced. We have a tendency to trust experts over algorithms because we’ve evolved with humans. We have innate learning biases which encourage us to focus on those who are successful. In contrast, data have only existed for a couple of decades, versus millions of years in our evolutionary history. Yet countless studies show that, on aggregate, data show better predictive power than the top experts in their fields. They use information in a systematic way free from human bias, hence their predictive power is so much stronger.
We need to recognise that data is the future and that that future is bright.
The Solution is Here
At Floww, we believe that real data makes everything possible. That’s why we’re fundamentally redesigning the system, injecting confidence back into decision-making through a data-driven, and therefore merit-based approach.
On Floww’s platform, Founders can simply drag and drop their financials or use free templates to upload their data for processing, eliminating early hurdles. Then, accountants are on hand to ensure a startup’s data is seamlessly developed into beautiful, real-time and easily interpretable information. This means startups can put their best foot forward at their own pace to investors, more easily gain funding and better understand their financial forecasts. Floww’s dynamic data system means that investors can also manage all their portfolios neatly in one place and keep track of historical progress and financial forecasts accurately.
Startups, find funding at your fingertips.
And what about those prized connections? Founders can connect with the investors that are right for their startup in one simple click, after searching through customizable filters. Startups can scale their business through targeted funding, and investors can in turn find startups that align with their values and discover new opportunities for growth through the extensive Floww marketplace. It really is that simple.
No more ad-hoc, time wasting pitches. No more unsupportable gut-feelings. No more back-room deals. Floww is providing a sustainable ecosystem guided by 21st century data science, to bring confidence, meaningful connections and most importantly, fairness into the world of venture capital.