From 2020, the startup ecosystem became diluted by unqualified entrepreneurs trying their luck with makeshift business plans. This means increased risk for angel investors, as the well-presented and innovative pitches, they receive are often not backed with actual researches.
“Everybody thinks that their business idea is the best. The number of pitches we are receiving has doubled since last year, and it used to take us significant time and effort to validate the business plans we liked. We were in need of a system to reduce our workload, and requiring funding applicants to append external market research results proved to be an excellent solution. We made a partnership to Brand Auditor, as their systems provide adequate information and affordable for most early-stage startups.” – Shared Franco M. from MedSea Capital.
Brand Auditor is a Malta (EU) based data and research company, providing a variety of cost-efficient market research and customer feedback-based business intelligence solutions for startups and SMEs.
Angel investors who started to require an external audit are generally very pleased with the insights they can get from these market validation audits. Based on survey feedback from thousands of respondents, these audits summarize how the target audience of a startup thinks and feels about the company, its products, or even the management. Positive opinions and high audit scores indicate that the startup will be welcomed by customers, while negative results accurately forecast disappointing sales results.
The growing number of investors requiring additional documents is not welcomed by startup founders. According to John Dickwood, “Producing external business concept validations and market research results not only increases the expenses of startups but also reduces the chance of securing investment. The startup community is generally unhappy with this trend of new requirements.”
For more information about Brand Auditor, and the controversial audits required from startup funding applicants can be found at www.brandauditor.me