Sell a good night’s sleep, not a mattress!
The scorecard lets the project initiators evaluate their proposal from the standpoint of potential startup investors like MavenCORE. Use it to evaluate and improve the information you have in your proposal. We use the same scorecard to assign a percentage score that is publicly viewable by anyone who comes across your proposal. A higher score means you have explained your project in a way that impresses many startup investors. It also means you have a higher likelihood of succeeding in your project, once the money comes in since you have covered all bases – assuming you stick to the plan.
If your proposal scores less than 45%, then you’ll miss out on getting funding from MavenCORE. Remember, the scorecard is for the proposal, not the project. So, you can think harder and update the areas your proposal fails to improve your overall score.
The Scorecard Elements
If a proposal is to attract investors, it should be easy to read and have good information flow so that people planning to skim through stick around long enough. You earn 2 points for each of these aspects:
- Minimal or no grammar mistakes expected
- Good flow – from problem, to solution, to execution. If you followed our proposal questionnaire, you should be okay.
- Break down of information into paragraphs.
- Use of subheadings – but do not repeat the questions from the guide when writing your proposal
- Separating the budget from the rest of the written proposal
2. Investor Confidence Boost
A proposal should be done in a way that reassures the potential investor that he or she is on the right track for taking interest. You earn 3 points for each of these aspects:
- Expressing confidence, in all sections of the proposal, that you believe the investor has enough money to fund this project is one way to boost confidence.
- Showing that the project is ready to go the moment funds are availed.
- Sound thankful for the chance to present your proposal to startup investors, not entitled.
- Discuss the skills or experience you have about the industry your project targets.
- MavenCORE is free, but spend some money out there to aid your search for funding – for example, get a professional head shot for your profile photo. pay a professional writer to produce an award winning proposal for you. Have a logo or company profile designed or “Google Investors“.
3. Acceptable contingency budget
Setting aside money for unforeseen circumstances is a proactive step towards success. Setting the right amount of contingency shows, you have a clue what you are getting into. Too high an amount or too low are both signs that you don’t have enough information. You earn 2 points for having a contingency/miscellaneous item in your budget and 3 points if its the right percentage.
4. Plan B
Talking about alternative strategies in case the main one fails is crucial. You might never use them, but it shows you are prepared to adapt. It’s a fact that many project initiators have read the market wrong in the past, but later succeeded by reinventing themselves. Common issues include:
- The need you want to fulfill might not be there
- The market size being much smaller than you anticipate
- Being ahead of your time.
An ideal project for most startup investors is one that can scale up or down if the need arises. At the start, someone may not want to commit too much;
- Can the operation scale down?
- Someone may really like the concept and want to go “all in” exceeding even what amount you are looking for. Can the project scale up?
Although investors love ideas that test new frontiers because of the potential returns, they also want someone who follows rules where necessary. Following the procedures specified by MavenCORE is one way to attract investors. For example:
- Do you insist on submitting a proposal via email or WhatsApp instead of the submission form? Insisting on those methods shows you love shortcuts and people who love shortcuts fail in most projects.
- Do you ignore the proposal format we’ve specified and come up with your own (You’ll lose points)?
- Do you alter the excel budget template – adding more rows, fonts colors etc (You’ll lose points)? Just edit the number if the budget template.
- Have you posted wrong information all over your profile? For example appealing for funding in your profile/user bio instead of describing your skills.
Based on what other people in the same industry say, how realistic is the project? We consider factors like:
- Is there a clearly discernible problem the project is solving?
- Has the initiator shown possession of the skills that can solve the problem?
- Is the budget in tandem with the described project?
- Is there a clear business model or it’s a ‘plan as we go’ operation. For instance, what is your main selling point – is it affordable price, exclusivity, high quality products or what exactly will customers like about your startup?
8. Return on Investment
- Have you discussed clearly the kind of return on investment?
- Does it seem exaggerated for that industry?
- Is it too little for the investment required?
- At what point from the funding date is the return expected?
- Is there an openly discernible market for the product(s) that the project offers?
- Is the market sustainable or just something temporary – new ideas can have a temporary market if the idea can be easily replicated.
- Can the target market afford the product at the quoted price?
10. Intrinsic Value
Does your project have a value beyond the ability to make money for you or the salaries you pay to your employees? To illustrate intrinsic value;
- Think of Mpesa. If today the service stopped working, many lives would never be the same. Therefore, even though the company my only see it as a cash cow, it has another value to the rest of us users.
- Here is another example. Let’s say 2 people want to start a milk processing business. The first one takes the regular route of buying from farmers, processing and selling it. The other one takes an unusual route of “processing as a service” – farmers come to his facility, process the milk using his machines, then the go and sell. The second approach has intrinsic value of knowledge transfer.
You don’t need to explain anything about the intrinsic value of your project. If it’s there, investors see it. If not, then that’s okay too. Remember, projects are funded for your benefit not other people.
By using a scorecard, MavenCORE does not have to reject your project because its not good enough. Instead, we highlight the areas you need to improve so that you can get money to start it.