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Quantifying Startup Risk

Quantifying Startup Risk

The current state of the startup ecosystem, marked by financial pressures and heightened caution among investors, presents a pivotal moment for reassessment and strategic adaptation. The failure of Silicon Valley Bank, rising inflation, increasing interest rates, and public setbacks of high-profile companies have instigated a wave of conservatism in the angel and early stage venture capital communities. This cautious approach is reflected in more conservative valuations, smaller funding rounds, and a heightened scrutiny on startup expenses and viability.

Using AI Tools with ChatGPT to Enhance Startup Funding Decisions:

In this climate of uncertainty and restraint, investors are compelled to reexamine their portfolio thesis and raise the bar for new investments. The need for a more rigorous deal flow management to support investment decision-making is more crucial than ever. This is where the strategy employed by groups like Queen City Angels (QCA) become particularly relevant. By integrating AI tools and platforms like ChatGPT into their evaluation process, QCA is starting to deploy a more analytical, objective approach to startup funding.

Taking a Quantitative Approach will Reduce Risk and facilitate Informed Decisions:

As investors navigate this redefined landscape, there’s a growing emphasis on sustainable business models, prudent financial management, and clear paths to profitability. The role of AI in this shift is not just about enhancing efficiency but also about fostering a more resilient and adaptable investment culture.

The Queen City Angels – It’s Early in the Process, and We Expect to Add More Value to the Startup Ecosystem:

My guest is Scott Jacobs, Executive Director at the Queen City Angels. In this podcast, we review how their online deal flow management application suddenly went dark as the supplier ceased operations.  This breakdown provided the motivation for Scott to research a new class of AI tools for evaluation and due diligence of potential investments.

 

Key Concepts

Microsoft 360 is a platform for collaboration.

The Queen City Angels created two data hubs, one for companies submitting an application for funding and one to record the domain profile of each members.

Scott created an integrated relationship between the two data hubs for the purpose of creating the most qualified team to review a company, conduct due diligence, and review the governances required by the company to the investor.

ChatGPT is available to process requests against the data in one or both data hubs, providing responses to ad-hoc questions.

Scott and this team are in the process of converting the raw data from the non-defunct deal flow tables into the data hubs and plan to create a historical profile of investments made during the past 23 years.

Scott believes the platform may be able to provide operational and competitive analysis on behalf of portfolio companies.

 

Contacts

Scott Jacobs : sjacobs@QCA.com

Jim Connor : jconnor@gamechangers.tv

Website Link - : https://qca.com

You can find more information about the Queen City Angels at

www.qca.com