My question for Follow The Seed + VC - what inspired you to create an algorithm that detects Unicorn worthy startups?
And is it true, that if they prove that they are the next unicorn, would you fund the consumer based startup?
@stringstory Thanks for this really important question.
We believe it's time to change the way VC industry operates (considering it hasn't change for 40 years) and truly democratise access to capital irrespective of where you're coming from, where did you study (or if you studied at all), what language do you speak and what's the color of your skin.
You'll be surprised how much the above criteria affect one's chances to get funded.
Not necessarily because the VC's are racists, but because they don't have too many alternatives.
Top tier VC's would easily get over 10K unsolicitated pitches a year, so in most of the cases they default to the ones that are referred to them by the people they know and trust. Now, there's nothing wrong with this, but if you're a founder in North Dakota (let alone in Eastern Africa) - your chances to raise VC funding are less than 1% of someone who just happens to live in the Valley.
The Raving Fans® algorithm was designed to enable everyone a fair chance and the only thing it cares about is your execution and whether you've managed to create a "Habit Forming" product.
The beauty of it is that entrepreneurs don't even need to talk to us, prepare pitch decks, build revenue forecasts (that generally go straight to the trash bin anyway) or drive/fly/waste time in countless meetings. Anyone can hop on our website, download an SDK, plug it in and within 2-3 weeks - we'll be the ones calling you and flying over to meet, assuming of course, you've made of RavingFans material.
Worst case - it's not that good, but hey, we didn't waste your time and you didn't waste ours.
Andrey, very cool! Do you plan to open this up as a SaaS product for startups to check their stats and VC's to use on deal flows? Have you considered opening up this up as open-source?
@iamwormify Thanks Luke. We know what we're good at and what we aren't good at. Being an analytics provides belongs to the later category, therefore we're not going to do it. We also don't think there's lack of good analytics products out there. Raving Fans® wasn't designed to solve this problem, but to assist us, as investors to look at more deals without any prejudice and of course on the flip side - to give all startups a fair chance at getting funded irrespective of their location on the Globe or any other subjective criteria.
Open-sourcing it will defeat the purpose, as there will be some people who would try to game the algorithm and trick us into investing in them and eventually will screw it up for everyone else.
@ashirben I think the data is really valuable, not just for investors, but startup founders too.
Totally awesome, I want to test it out actually. Perhaps this weekend or Monday, we're launching something similar to Reddit (but used in a different way). Would be interested to see what the data says, tracking from Day 1.
It would super cool to have like a "Raving Fans Bot", with automated messages & triggers that get sent out to founders based on metrics, KPI's etc.
@pvptowers Thanks Paul. Raving Fans® is territory agnostic and so are we as a fund. Most of the investors we've spoke two asked us the same 2 questions:
1. Can you run your algorithm on this investment we've just made, as we're really curious to see how it ranks?
2. Actually, can we also use your algorithm as a filter in our deal qualification process?
Based on investors feedback, we've developed a "partners" mode, where we license our algorithmic assessment capabilities to other funds in return for an ability to co-invest in deals Raving Fans® scores highly, so we're actually putting our money where our (algorithmic) mouth is.
Awesome! A bit of feedback for the website - it's really difficult to read. Set something like this for your body text font-size: 20px; font-weight: 400; text-align: left; color: #333; The people of producthunt will thank you for that!
good idea, but i'm skeptical that legit companies are going to install a random VC fund's sdk. might work for some not based in silicon valley, with limited access to investors
@_jacksmith Thanks a lot Jack, our approach and the algorithm were specifically designed for companies and entrepreneurs that are based in locations where funding environment is much more challenging that in Silicon Valley, but we believe there are a lot of smart people outside of it and we just want to give everyone a fair chance at getting funded irrespective of their location.
@_jacksmith We're going to try it out for a startup we're launching next week & it'll be interesting to see how it goes. I'm particularly interested in the data. I see this as an advanced version of Mixpanel & Kissmetrics - instead of focusing on funnel optimisation, it looks for trends to show if the product is sticky & "hooks" users, or as the website puts it, users do things "irrational" & become "raving fans" ... reminds me of the YC expression "build things that users love." This tool, I believe detects this,
From a founders perspective, we can save a lot of time. Typically here in Australia it may often take 6 months to raise capital, sometimes a lot longer, sometimes shorter. Investors here are risk adverse and invest at a much later stage. The other issue here (or problem), for those that "hold off" on funding and choose to raise later ... it's more beneficial for them to seek outside funding from the States, on much better terms.
Our product is a social platform, and I believe it could grow fast as the feedback has been really positive - we can keep opening up new categories #startup #funding #food #fashion etc. This product in particular, I think it's more suited towards American investors.
I'm willing to give it a go if it saves us time raising funds and lets us focus on building a better company. Gives us more options too 😻
"String, I found a way to spot unicorns early, you have to check out "Raving Fans" and you know if you reach a certain about of growth and traffic, these VC will fund you as a startup"
This blew my mind.
With certain explain, I realised, that such an amazingly simple idea, as a Startup you can prove that you have growth and fundable by installing this algorithm to check whether your product is going to be the next unicorn.
And guess, it's FREE. anyway install it and see if you have raving fans.
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