Valuation
April 7, 2022

Insights from BV4's startup database - Team

Insights from the BV4 database (2/4)

In this series of articles, we will look at different data-driven insights that BV4 gathered from startups. In this article, we will have a look at important qualitative aspects of the team and how they correlate with each other.

 

Recap of the underlying model:

BV4 built a qualitative scorecard model which focuses specifically on such qualitative aspects (e.g., team complementarity, previous founding experience, development stage, scalability potential or the go-to-market strategy of a startup). Thus far, BV4 has scouted over 13'000 startups of which more than 3'000 were assessed. Over 200parameters have been considered to perform the assessments to obtain the scores in four distinct dimensions: product, business model, team, and market. BV4assesses several qualitative parameters within each dimension.

The following graph shows some parameters of the BV4 model:

The result is a score, which represents the risk profile of the startup at its current stage. The colored rating scale on the right side shows that a high score indicates that the startup is an attractive case for the average investor. Startups should achieve a higher score over time as their products get closer to the market and they gain more traction, clarity on the business model as well as important target clients.

 

The analysis of the data on the team can be found below:

Startups in our database show three important relationships when it comes to the founders and their team structure/set-up.

- Founders tend to work in an industry that they have either experience in or obtained a degree in a relevant field for such an industry. That is expected as the founders must understand the market and its problems to provide a product that can succeed in the market

- The stronger the time commitment (full-time or part-time) of the founders, the more careful they are at choosing their advisors. It appears that the founders who have more at stake, are fully aware of the benefits that a strong advisory board will give them. Good advisory boards consisted of industry experts with a network as well as advisors that are familiar with the startup ecosystem and its challenges

- The value of a complementary skillset within the team is well-understood by the startups because experienced founders (founded startup before) have a higher chance of building a team that covers a wider range of skills that are needed to scale the company

Our data sample consists of 444 startups of which the majority operate in the field of Med/HealthTech, FinTech, EnterpriseTech and DeepTech. The startups were mainly operating in the Pre-Seed and Seed stage. While the data sample represents only a fraction of the overall ecosystem, it already gives insights into some points that founders should consider when building their ventures.

In the following articles, we will focus on the most important data patterns for the Market as well as the Business Model.