The field of investment into startups has been highly risky due to numerous factors. In addition to external factors, such as market situation, regulations, social and economic development stage, there are risks coming from the startup itself, such as experience, capacity to deliver, efficiency of marketing strategy and execution of the project.
Currently, the market is saturated by the number of investment analysts and venture fund managers who are analysing and taking decisions on the best investment options. But how efficient this system can be if for any single communication with an investor, a project will need to go through the “filtering” from the very beginning. How efficient this system can be if each analyst, each investor is implementing their own criteria/measurements for assessment and not widely sharing results of their analysis with each other. How efficient this system can be if there are no unified standards to assess the project and get established reputation based on your previous activities.
That is right, the system is not perfect. But this issue can be resolved by adding knowledge and experience of the community.
Nowadays, communities play a major role in the success of business projects. Many startups deﬁned as unicorns owe a considerable part of their success to the relationships built thanks to their communities. However, communities can provide more than just connecting the players. For example, sharing visions, estimating certain aspects crucial for the evolution of a startup, supporting other players in the decision-making process, and building a solid understanding about product markets.
By creating a trustworthy common ground, it is possible to distinguish the most promising and robust ideas, projects, and companies in a faster and more precise manner.
To create trustworthy and transparent system of social assessment, it was decided to implement blockchain technology, so that the instrument allows all the players to give and support their assessment of one or several aspects of the startup. The advantages that blockchain creates for this project are trust in and among the actors, transparency, a certain level of anonymity, tamper-proof track of the startup ratings, and secure storage capacities.
The main users of the instrument will be investors, startups and service providers.
Investors can use it for creation of investment funnel; for startups it is an opportunity to get evaluated by the community and further noticed by investors; and service providers will be able to demonstrate their expertise and attract new clients.
The system is now in B-testing to be later implemented on InnMind. It will be actively used by InnMind ecosystem players to assess startups, monitor their performance, provide relevant services and choose appropriate service providers, and, last but not least, select projects for investment rounds.
You can read more about the instrument in the article “A Startup Assessment Approach based on Multi-Agent and Blockchain Technologies” published by Springer.