For all of the suffering 2020 brought to the world, crises also catalyze adaptation and innovation for good.
Businesses around the world were challenged like never before; inability to meet face to face, manufacturing and supply chain interruptions, unprecedented health and welfare concerns for employees, events and gatherings outlawed in many countries and in some (fortunate) cases, managing stratospheric growth of health care and technology-based businesses.
2020 also accelerated the evolution of societal norms.
We no longer shake hands; a standard etiquette with origins in medieval times intended to establish goodwill by proving that one’s right hand did not bear a weapon.
We are comfortable using technology to connect where travel, financial costs and time were loss-leaders accepted as requirements of sales prospecting, customer and partnership interaction.
We were also forced to innovate; investing significantly in opportunities created by the vast product and service gaps expected in a post-pandemic world.
And this is where businesses are changing the world. With vision, persistence, and capital.
Founders and leaders adapted. Every aspect of business in every industry has seen innovation and opportunity. However, the greatest constraint to the rapid development and deployment of these innovative solutions is the capital required to produce and scale these evolutionary advancements.
Powerful technology to the rescue.
Fundraising and capitalization requires identification of investors, pitching, negotiations and due diligence in advance of all transactions. The vast majority of transactions fall apart during due diligence; where the business fundamentals are tested against the criteria investors set for their desired returns, timing and risk tolerances.
Simply put, a company will invest its limited time and money to identify investors, pitch investors, negotiate with investors, only to see investors walk away when a mismatch of goals and fundamentals is identified at the end of the due diligence process.
This is a tragic waste of time and resources for both companies and investors.
Starting with the end in mind, a unique technology platform was developed that enabled both companies and investors to use due diligence to filter their lead flow, protecting themselves from spending their limited time and money wining and dining, pitching and negotiating, writing legal LOI’s and MOU’s when a fundamental gap existed that would derail the deal in its final stages.
The founders of Sploda.com experienced first-hand the challenges of raising and investing capital.
When trying to raise capital, their greatest challenge was getting connected to real investors. If any introductions could be secured, the person making the introductions demanded punishing finder’s fees simply for connecting the two parties. Paying fees of 5% – 8% (or more!) of a total investment to people for making introductions would have been crazy if there were other options.
Similarly, if they hired a fundraising service, they had to sign an exclusive agreement and weren’t allowed to work with any other fundraising services or networks. It was an expensive, inefficient and limiting process being forced on companies who were already financially at risk.
Another paralyzing step in the fundraising process was the need for a company to manage the due diligence rooms for every investor reviewing their data. This meant that each month as new data arrived, every single investor had to be updated separately. The fundraising model was critically flawed.
For investors, the number of hours being wasted reviewing pitch decks and meeting with inappropriate companies was staggering. Unbelievably inefficient for people whose time truly represents money.
One round of diligence to rule them all.
Sploda.com became the solution. Operating in twenty-eight countries, Sploda connects companies of all stages (pre-revenue to profitable), public and private, in all industries to verified investors around the world.
When a company makes an update to its diligence data in Sploda.com, the update is automatically shared with all matched and future investors.
In the fundraising industry, Sploda.com is a massively disruptive technology platform. The fundraising model is filled with toxic practices like exorbitant finder’s fees, exclusive contracts limiting access to resources, and predatory transaction fees, Sploda.com connects companies to investors for a trivial monthly fee ($29.99 USD), and investors to companies for free.
Sploda.com is the only financial services network to automate the due diligence process. Their technology enables powerful filtering capabilities that significantly decrease the risk of a transaction failing in the due diligence stage of negotiations.
Investors spend five minutes selecting the criteria that they seek in an investment. Companies spend thirty minutes answering a due diligence questionnaire. Sploda’s matching algorithms automatically isolate the key data and connect the two parties when critical alignment is met.
No finder’s fee. No contracts. No exclusive service agreement.
For all the tragic outcomes resulting from the COVID-19 pandemic, many positive innovations have emerged. New technologies have been developed, creating efficiencies where archaic practices remained in place. Corporate cultures leapt forward, forced to accept new norms for communication and remote project management. Perhaps most importantly, new technologies have been welcomed to disrupt established business practices and bring new and improved tools and processes to the twenty-first century.
Sploda.com is just such a technology.
Companies and investors still rely on proprietary processes to vet each other, negotiate terms and build successful ventures together. However, both companies and investors will waste less time cultivating deals that are likely to fail.
Sploda.com sends high-value lead flow to investors while enabling companies to efficiently and inexpensively connect with verified investors. Visit www.sploda.com to learn more.
Investment conferences, business pitching events, business financing workshops and wealth strategy presentations are but a few of the resources available to investors and companies who hope to make more money together.
Events of quality share unique nuggets of wisdom, tales of success and failure, and provide additional perspectives on the complex art of investing and portfolio management.
Experts on stage often highlight the importance of understanding your target markets, having industry experience incorporated in your decisions, proper due diligence and negotiation practices that extract as much value as possible from each investment and acquisition opportunity.
They also focus on disruptive companies whose technologies or widgets create a unique value proposition within their target markets. Everyone knows that a me-too product is simply playing a pricing game when a first-to-market product often ends up owning the category…
The best-known investors often share insights into their investment models and processes. Some explain how they value profit more than earnings per share. How they prefer identifying early stage companies before they become unicorns or how they diversify risk based on micro economic factors specific to each country where they target their investments.
What’s interesting is what they don’t say… They don’t discuss the archaic process of investing and why it has taken so long for investors to incorporate technology into their business models.
For millennia the investing and fundraising dance has played the same song. Companies pitch anyone who will listen and investors listen to thousands of pitches that never had a chance of being a fit. While the props being leveraged during pitches have evolved, the time wasted by both investors and companies remains largely unchanged.
The reason is cultural.
Take dating as an example. Thirty years ago, people went on dates with anyone who said “yes”. Most dates failed to advance and significant time and money was wasted wining and dining people who were fundamentally not a match.
Twenty years ago, online dating services started offering introductions to people based on emotional preferences and some personal data. People still dated before getting married but now their first dates were being filtered so that less time was wasted courting partners who were obviously not a fit.
It is important to note, while people were starting to use online dating services twenty years ago, they wouldn’t discuss it publicly. At weddings it was rarely admitted that the couples met using a dating service. It was not yet culturally acceptable to admit that technology could add value to the dating process.
Nowadays, online dating services are the commonplace. They connect people using algorithms that are intended to provide greater chances of success in meeting a mate than by natural selection.
The investment process is twenty years behind the dating process.
On stage, famous and successful investors admit freely that they waste a significant amount of time listening to pitches and companies who would never have been a fit. They date without filtering their partners…
It’s now time for investors to embrace technology in the same way online dating disrupted the dating scene.
Technologies like Sploda.com have automated the due diligence process, empowering investors to use real due diligence filters to ensure that the companies they “date” meet their investment criteria.
On Sploda.com, investors spend five minutes selecting their unique due diligence criteria and metrics. Automated algorithms filter out a global database of companies seeking capital or sale and the investors are sent due diligence summaries of the companies meeting their criteria. Free.
Why free for investors? Because cash is king and queen.
Companies pay $29.99 USD/month to have the opportunity to be matched with real investors. Businesses like Sploda.com are global networks of companies and investors and are successful based on the volume of users rather than high priced transactions.
Investors use technologies like Sploda for simple and efficient lead flow of investment and acquisition opportunities, or they can set Sploda.com up to filter every single pitch submitted to their firm.
Instead of combing through pitch decks and emails, a succinct due diligence summary for each matched company is available to investors, including the contact information for the company.
Investors’ contact information is not available to their matched companies however, investors use Sploda.com to protect their privacy while adding to their valued lead flow.
This is a technology match made in heaven.
As investors embrace disruptive technologies like Sploda.com, the fundraising dance odds improve and more transaction marriages result.
It won’t be long until investors begin admitting that they met their most celebrated investment companies using services like Sploda.com as well.
Established in 1602, the Amsterdam Stock Exchange is considered the oldest exchange in the world. It goes without saying that the same week the exchange opened, the first “investor relations” job was created.
Very little has changed since 1602 on this regard.
Public companies hire individuals and firms to broadcast news to their target investors. This news is intended to spark buying of their stock, increasing their liquidity and giving confidence to investors that they will be able to sell the stock when they choose to reap the rewards of their investment.
Tools available for broadcasting public company news include newsletter services, newspaper editorials, paid advertising on radio, tv and internet, fundraising service providers and investor relations companies. Each service offers a connection to potential investors and as such, validates its costs through share price performance metrics.
In the high stakes game of investments, fees for these services are similarly high. Often, service providers require minimum contracts of 6 months, exclusive finder’s fees payments for bought deals, unrestricted shares in the client companies and performance bonuses throughout.
Until recently however, technology hasn’t been leveraged to create efficient and inexpensive access to verified investors.
One such technology platform is Sploda.com. Sploda is unique in that it automated the first stageof the due diligence process, enabling investors to gain lead flow and insights into public companies based not on press releases but on real due diligence data.
Five minutes to sign up on Sploda.com (without charge) and after a quick verification process, investors automatically begin receiving due diligence summaries of companies that meet their unique investing criteria. Investors can open a fire hose of lead flow or tighten their filters and receive one or two leads per year. The filtering technologies are powerful when data like due diligence is available to be leveraged.
Interestingly, Sploda is 100% free for investors. Investors receive the due diligence summaries and contact information for their matched companies should they wish to learn more directly. Companies do not receive the investors’ contact information but are notified of matches, types of investors and their geographic region.
Technology platforms like Sploda.com earn their monthly subscription fees from companies who want to broadcast their investment opportunities to relevant, verified investors. A single month of unlimited matches to a global network of investors is less than lunch with a single investor target ($29.99 USD). And Sploda.com does not charge finder’s fees or require any contracts.
Targeted networking platforms are not new, just new to the quiver holding investors’ arrows.
In fact, the online dating industry proved that pre-qualified lead flow creates better odds for constructive relationships. Mismatches between people who do not agree on kids, smoking, drinking, travel, language and social interests are now managed using algorithms intended to improve the networking process for everyone.
Sploda.com brings the proven “online dating” model to the world of investors and companies seeking capital. And it is the least expensive, most efficient method for public companies to connect to verified investors anywhere on earth.
Investors will continue to benefit from listening to pitches, attending promotional events, subscribing to newsletters, and engaging other lead flow and analytic services. However, incorporating lead flow and analytic technologies like Sploda.com are no-brainers when it comes to leveraging efficient and inexpensive resources to make more money.
Visit Sploda.com to learn more.
Twenty-Five Years ago, single people connected at bars, events and leveraged friends for introductions to other single people.
The dating model worked but the strategy of pitching a date to anyone accessible was also inefficient and emotionally taxing. Reasons for failure were sometimes superficial (example: no attraction) and often deeper (children/no children goals).
The global population had grown for millennia however so why change the dating model if it was not broken?
Enter stage left: online dating services. The premise that “incompatibilities could be identified in advance of people spending time and money courting other people who were not fundamentally a fit” was at first socially unacceptable.
Couples were shy to admit they met online. But more and more couples dated, got married, shared the stories of how they finally met their soul mates, and culturally it became acceptable to admit that a successful relationship could have been started from a technology platform.
The dating scene and the investing/fundraising scene are the same.
Investors and companies connect everywhere. The failure rate of first pitches may even exceed the failure rate of first dates decades ago… but investors generated returns and companies received funding.
So why change something that isn’t broken?
The opportunity for eliminating fundamental gaps between investors and companies is the exact same as the online dating solution. Where singles were no longer going on first dates with incompatible singles, investors now have access to technology platforms that protect their time and resources from being sucked up by companies that do not match their unique investment criteria.
How to choose an investing and fundraising platform? Start with the end in mind.
Investment does not happen without due diligence. Due diligence is typically the final hurdle a company must clear in advance of capital exchanging hands. Unfortunately, due diligence is often where deals collapse because the data uncovered in due diligence can reveal fundamental gaps between the two parties.
A perfect example is where two people date for a year before realizing that one of them hates the idea of marriage and the other dreams of it. Unnecessary pain and suffering for two people whose incompatibility was fundamental. It was a problem easily solved by online dating algorithms.
There is now an investment technology platform that has automated the primary due diligence process for the purpose of connecting like-minded investors and companies seeking capital.
Sploda.com is a global due diligence database of investors and companies seeking capital (equity, debt and sale). Its network includes public and private companies of every stage from every industry and investors of every type (but all must have capital intended for investment).
Brokers use Sploda to identify public company profiles with the criteria they target for investment. Fully automated, Sploda.com sends them due diligence summaries matching their criteria.
Venture Capital firms want their lead flow filtered so that their employees’ time is spent assessing high value companies. Sploda.com is used as a filtering system for every company emailing pitch decks and requesting meetings.
Companies seeking capital complete a single round of diligence for a global network of investors. Instead of having to update diligence rooms for every single investor, there is only one diligence room to update and every matched investor is automatically provided news of their progress.
How does Sploda.com work?
Companies are required to complete an automated round of due diligence in order to join Sploda.com. The online due diligence questionnaire requires approximately 30 minutes for the first round and updates can be completed in seconds.
Investors spend five minutes selecting their target due diligence criteria and are provided due diligence summaries of companies matching their goals.
Investors are matched to companies for free. Companies pay $29.99 USD per month with no other fees.
Investors receive the contact information for each matched company. Companies are notified of investor matches, the type of investor and their general location but do not receive the contact information for the investors. There are benefits to controlling the capital…
Learning from the online dating model.
An investor who targets “pre-revenue companies in the technology industry that are forecasting “X” revenue within 12 months based on a predetermined number of LOI agreements” should be able to receive introductions of companies meeting these criteria.
In this day and age, investors should not be sitting through pitches from companies that don’t meet their due diligence criteria.
And companies should not be wasting their valuable time pitching incompatible investors… “Well that’s an hour we’ll never get back” should be a phrase from the past.
Investing and fundraising is all about lead flow. If each entity fills their schedules with high-value targets, their success rates will rise. Everyone will make more money.
Sploda.com provides efficient and inexpensive lead flow for investors and companies seeking capital.
It’s time for investors and companies to date responsibly.
You’ve got a brilliant idea for a new business. A clear path to revenue and your risks are manageable. You simply need the financial runway to start.
In the news you’ve read reports of investments into businesses you’ve never heard of. The figures are usually quite impressive (which is why they were reported in the first place), and indicators suggest that a significant amount of capital is available for investment and waiting to be deployed.
Your friends and family are supportive. You have trusted business partners who are ready to make the leap with you and good people and good ideas are a formula for success. Right?
Yes. Yes. And yes. But that doesn’t mean that raising capital for your first start up will be easy.
Understanding investors’ motivations, internal processes and goals are essential to successfully raising capital. Also, it is important to understand why some companies are funded while others are not. Comparing your opportunity to other funded companies is rarely comparing “apples to apples” and while insights can be helpful, drawing incorrect assumptions can negatively impact morale unnecessarily.
Let’s stay positive and start with the most important information first: How Investors Think.
For the purposes of this article, we won’t be discussing investors who are categorized as friends and family. The reason for this is that friends and family will support you because they care about you. They will assume that you are honest, hardworking and that you will be successful. None of this applies to a sophisticated investor; it will be up to you to convince professional investors that all of the above is accurate.
Please also note: the terms “professional” and “sophisticated” are interchangeable when labelling investors. The titles are simply meant to imply that an investor is experienced, adept at business analytics and is process driven. Repeatable processes create predictability and investors want to repeat successes and never fail twice the same way.
Let’s begin. If there is one message that you take away from this article let it be the following:
Investors want to know how much money they will make, how quickly, and at what risk.
Your role is to focus on these three questions when pitching profit-driven investors. Everything else is secondary.
The first two questions are easily addressed by your busines model’s financial forecasts. Where inexperienced companies err on these topics is that they focus on presenting the financial success of the company and fail to translate the value being created for the investor.
You need to be clear. For example: Investors need to know that if they invest $100,000 now they will receive $250,000 back in 24 months.
This, my friends, is called the “hook”.
Once the hook is set, the real work begins.
You need give the investor confidence that this investment opportunity is within their risk tolerance profile. Investors believe that the following items reduce their risk, and as a result make your proposal more attractive:
Convincing investors that they should trust you with their money is not easy for anyone. When you read about successful investment rounds in the news, it’s worth digging to better understand why they were successful. Don’t assume that other companies faced the same challenges as your start up especially when they may have had several of the issues above working in their favour.
Furthermore, set the hook deep by focusing on the “what’s in it for the investor” before focusing on what you do and what makes your company special. Investors will pay far more attention to an opportunity to make money than simply learning about a new business.
Finally, focus on de-risking your company in the eyes of investors. Recognize that there are thousands of other companies competing for investment dollars right now; investors will invest in you because you will make them a predictable return in a predictable time frame at a predictable risk level.