How could the analysis of the startup carried out by Startupxplore affect my profitability?

Category: Analysis

There is one part of Startupxplore that we consider vital, and that is the analysis we carry out of the startup, what is commonly known as a limited Due Diligence and which we like to call “thorough analysis” of the key matters.

This is nothing more than an analysis of the company on various aspects to validate the existence of certain risks and, if they exist, whether it makes sense to bear them. Our analysis focuses on the legal, tax, financial and product/technology aspects.

The purpose of it as we have commented is to identify the relevant risks, if any, and therefore try to invest only in those companies/products that have certain mitigated and/or assumable risks, and which therefore directly affects the probability of obtaining a positive and high return: the famous positive exit (greater than 1X).

THE IMPORTANCE OF A POSITIVE ANALYSIS

And here comes the good thing! Since we love to support our actions with data, we would like you to analyze in detail the following chart, which we believe clearly explains why we do what we do:

Imagen 1.1

Source: Returns to Angel Investors by Groups, Angel Capital Education Foundation

As you can see in the table, there is a direct relationship between the time spent on due diligence and the returns on investment. Those Business Angels that invested more time in the analysis obtained a higher return than those that used less resources for this action… In all cases!

Therefore, it is no longer enough to carry out due diligence alone, but the resources invested for this purpose have a direct and positive effect on the results (profitability)… and for multiples over 30x, only those that have carried out an exhaustive analysis are the ones that have managed to achieve these multiples, that is, it has a direct and positive relationship.

HOW DO WE DO IT IN STARTUPXPLORE?

It is very important to bear in mind that it is not only the number of hours spent on analysis that matters, but also the quality of analysis. That is why at Startupxplore we try to surround ourselves with the best team and partners: we have a multidisciplinary in-house team with notorious experience in their respective fields, from law, through technology, marketing and finance… amazing team!

Some of the things we do in Startupxplore:

  • Product analysis by the technology team.
  • Legal analysis by the operations team.
  • Financial, fiscal and market analysis by the analysis team.
  • Metrics validation, this is vital! We make sure that all the metrics on the opportunity page (description and detail of the partnership) are true.

We know that this “analysis” is very good, but what is it really? Don’t worry, this is something that we will tell you little by little, we don’t want to reveal all our “secrets” at the same time…

In addition, we have some of the best partners and equity partners on the national scene that we rely on when analysing.

TO SUMMARIZE…

Whether you decide to invest directly in companies or through a fund or investment platform such as Startupxplore, it is essential to carry out an exhaustive analysis of the opportunities if you want to have relevant multiples.

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