VCs receive a steady stream of business ideas and proposals, yet only a few percent ever make it through their process. Actually, to keep up their business they need about every tenth project to succeed. Analyzing and filtering the projects is therefore crucial to their business. However, this is a very time consuming task – ideas need to be understood, the people behind them need to be verified, they need to keep up with trends in any industry and they need to understand whether they would be the right investor for the project.
To achieve that they have set up elaborate processes to filter out valuable opportunities.
A typical simplified deal flow process.
At each point a project can drop out of the process, because following through with all of them will cost them not only a lot of time, they might also miss another great opportunity because they don’t have the resources.
Aleacta’s Insight Engine facilitates this process by automating and supporting every step of it, cutting down processing time from up to two weeks to a few minutes. This enables us to also valuate each process for every aspect in the workflow.
The deal flow using Insight Engine.
Given only a few input parameters and the startups pitchdeck we can automatically find and research relevant data and put it into context in a knowledge graph. To do this we search a predefined set of public information – social media, news, commercial registers, trend reports etc.). Our algorithm not only generates a quick overview over the project, everyone involved and the internal “fit” (e.g. do we have contacts that might bring this project forward). We also train a predictor on several measurements taken from the graph.
A knowledge graph, in this example showing the connections between people and companies.
The result is not only a much more efficient process, but also a better analysis of the business idea, giving the VC the ability to process more applications in a shorter timeframe.
The project qualification is tailored specifically to the VCs investment profile.
Analytics view in the Insight Engine.