Colorado entrepreneur and angel investor Kevin Johansen likes to take a metaphysical approach to the startup pivot with a quote by comparative anthropologist Joseph Campbell.
There is perhaps nothing worse than reaching the top of the ladder and discovering that you’re on the wrong wall.
While that realization certainly sucks for entrepreneurs in the trenches, it can be particularly grueling for their angel financiers. The folks who invest their expertise, money and, more importantly, their reputations in young companies. Make too many bad bets and you’re soon out of cash and clout.
Johansen is doubling down on a bet of his own—that investors are clamoring for better ways to evaluate deals.
On the front end, Johansen’s startup, BusinessCatapult.com, is a collaborative platform for connecting investors and entrepreneurs. Dig a bit deeper and it’s a robust dashboard that distills a startup business plan into a funding readiness metric that enables angels to make more informed investment and mentoring decisions.
According to Johansen, half of angels never do another deal after their first. His hypothesis is that the request filtering and due diligence process is such a pain to manage that potential seed and early stage investors give up.
But that access to quality information about startup funding needs doesn’t begin and end with the funder and funded nexus.
Johansen and his team are also looking to create a network effect for investors that taps the collective intelligence of startup incubators, universities and professional associations with deep market and technical expertise.
So far, the Business Catapult has 3,500 beta testers using the site and generating data through business plans, benchmarks, angel know-how and pre-screening applications for investment events.
Two startup co-founders who were selected to pitch at the Angel Capital Summit gave the system a thumbs up.
“The problem that Kevin is solving is a huge and real problem,” says Scott Yates, co-founder of the content crowdsourcing service, BlogMutt. “It’s a ‘how do you eat an elephant?’ kind of problem. He’s taken a great first step.”
Online customer feedback system JetJaw‘s Mark Salsberry appreciates the pointers built into the Business Catapult when he drafted his company’s profile on the platform to earn one of the summit’s coveted 40 pitch invitations.
“I’m glad that it asked the tough questions,’ adds Salsberry. You want to set the bar high. These are the tough questions that you are going to get from investors.”
The expansive criteria on team leadership, market, product and finance also earned high praise from Yates and Salsberry, both graduates of the Founder Institute and veterans of pretty grueling pitch processes.
Like the startups he’s matchmaking, Johansen and team are now gearing up for their own $1 million Series A round after bootstrapping through the beta release.
The site is currently free to both startups and angels. Premium services for entrepreneurs, like an eHarmony-styled investor referral network, are being rolled out to assist cash-hungry entrepreneurs find those elusive individual qualified investors and member-managed investing clubs.
One especially interesting future add-on, Johansen hints, is a predicative analysis feature to help investors gauge a startup’s potential success.
Ladder? Meet wall-destroying trebuchet.