30th March, 2017
Founder and CEO of angel investor group and startup generator Investible, Creel Price, doesn’t want to see your pitch deck or listen to your presentation – he’d rather ask you a few questions.
Well, he does, but the questions are far more important.
Price and Investible have spent eight years refining a continual process which is designed to sort the wheat from the chaff when it comes to startup hopefuls.
Thanks to shows like Shark Tank and the buzz around innovation there are a lot of them.
“There are so many online resources for pitch training which is all good stuff, but equally there’s a lot more deals out there and I think as a percentage there are fewer quality deals,” Price told The Pulse this week.
“It’s harder to find the good ones around the noise.
“That’s partially why we’ve tried to systemise the process to be able to do it at scale.”
Price, together with co-founder Trevor Folsom started Blueprint Management Group with $10,000 and exited for $109 million.
He’ll be presenting on Investible’s 16-point startup investment criteria, something which has been gradually refined over the past eight years.
However, thanks to the plethora of hopefuls (he estimates 100 a week) pitching for investment, Investible has had to rapidly refine the model over the past 12 months.
All up, Investible tries to mine about 300 data points to make a decision on whether or not to pledge ongoing investment in a startup.
While there’s 16 specific areas, Creel said six broader areas stood out as being compelling for Investible.
Creel said that some of the decision on whether to fund a green startup still came down to gut-feel, but Investible is attempting to bring data to the forefront of the discussion.
“Most of the people who come into the venture capital system try to bring data to bear, but it’s mostly historical data or comparative to similar companies in different industries,” said Price.
“But we’ve gone to lengths to figure out how we can get some data points to get some qualitative stuff.”
He says data isn’t just about helping Investible make a better decision, but it’s fairer on entrepreneurs as well.
“Our process is about providing a level playing field,” said Price. “Unfortunately, most angel investors rely on pitch decks and pitches, which means that the best orators and the best graphic designers get the money.”
He likened selecting a startup on a pitch deck or a presentation to picking a horse on Melbourne Cup Day based on its name or its jockey’s colours.
“That’s what a pitch deck really is,” said Price. “There has to be a more sophisticated way to do this.”
He said that Investible wanted the process to provide the data upon which Investible could decide whether or not to keep funding a potential startup.
“You go through it, and if you’re a good founder and you have a good business you’ll get through. Even if you don’t, we don’t say no, we say not yet.”
He said part of the motivation for developing a rigorous process was born of simply wanting to give better feedback to hopefuls that don’t make it through.
“Yes we want to make money for our investors, but equally people’s lives are affected by our decisions,” said Price.
“You only improve the innovation quality in this country by giving people specific feedback on where they didn’t quite stack up against someone else.
“We feel providing them more data points around what they could do better is how we could contribute to the ecosystem. “
Creel Price and Investible will be presenting at the Myriad festival in Brisbane