Last month, we outlined the five metrics that go into evaluating early and late-stage companies. First, we dove further into market size. And when it comes to early-stage companies, oftentimes success is tied not only to whether or not the market is trending and a pain point has been identified but to whether or not the team at hand is the right team to solve that problem.
At KingsCrowd, we analyze founder potential by combining two metrics: 1) Does the founder have past experience in the field in which their startup exists? And 2) Does the founder have past entrepreneurial experience?
Ideally, the answer to both of those questions is yes. Or, at the least, many of our top-rated deals check both of these boxes via a few high-up members of the team. Of course, we also take into consideration education and past unrelated business experience.
Arguably, founders are one of the most crucial predictors of a startup being successful, especially at the early stage. Again, to stand out, especially in crowded markets, success comes down to whether or not that team is the right team to solve the problem. This is particularly true in industries that rely more on who you know, rather than what you know. Not to mention, much of early funding for these ventures comes from networking.
In addition to the two metrics listed above, research has delved into many, many seemingly unrelated characteristics of successful founders. Age, for example, is heavily correlated with whether or not a company succeeds. Also important? Whether or not the founder has technical skills, according to Harvard Business Review.
Many metrics associated with founders are also difficult to quantify. Work ethic, for example.
This is where we come in with Founder Profiles. We at KingsCrowd want you to make the most informed decisions with your money, which is why we reach out to many of the founders of companies we rate. We ask questions we think our investors would want to hear answers to, hopefully giving you a better understanding of their skills, their backgrounds, and of course, their personalities.
Wall Street has Morningstar, S&P, and Bloomberg
The equity crowdfunding market has KingsCrowd.
About: Olivia Strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.