Overview
We are living in the age of Data and Algorithms – and the proof is clear when carefully examining the world’s fastest growing technology companies such as Apple, Google, Facebook, and Amazon.
While these companies appear to be selling electronics or providing search engine services or functioning as a social utility, they are actually all in the business of acquiring and monetizing data.
“In the last 2 years, the world’s data has multiplied 100x. Companies like Facebook and Google are leading the way. The Quantified Fund will find niche opportunities within this growing sector through subject matter expert algorithms.“
The Quantified Fund aims to invest in and develop startups focused on the unprecedented growth in data warehousing, processing, and creating new value streams around data.
Quantification of the Qualitative – smartphones, sensors, and “wearables” have introduced hundreds of new data streams to literally quantify what was once limited to only qualitative analysis. Consider that as of August 2013, Facebook began to track people’s “feelings”. This is a move signaling yet another shift to digitizing life – even the most esoteric characteristics – in this case emotional sentiment.
Data and Algorithms – discovering or acquiring data is only half the process. Once you have accessed data, one needs to process this data through subject matter algorithms in order to extract true value. Capturing this data is the first step; but how a company processes and purposes this data is as important as the capture. Quantified Fund startups emphasize the capture and the processing in their business model and management teams.
Our Fund is led by award-winning entrepreneurs and seasoned financial management experts.
THEMATIC AREAS OF FOCUS
- Data and Algorithms
- Quantified Self
- Personal Health
- Corporate Wellness
- Industry Expert Verticals (Content, Community, Commerce)
- Mobile Sensor Technology / Intelligence Systems
Due Diligence
The Quantified Fund takes a qualitative and quantitative approach to conducting formal due diligence before any investment term sheet is presented to a startup. The process is quite unique as we do apply principles and surveys that anticipate the top failure points of a startup in the genesis stages of development. This ensures our investments have a much higher likelihood of success.
The following is a general guideline and outlines the steps and areas of emphasis.
BROAD CONSIDERATIONS AND ANALYSIS
Our investigation process is designed to discover any negative attitudes or potential bottlenecks at the team layer. We also deeply care how the founders know each other – their history, their source of respect for one another.
The QF target business model is as follows:
mobile data acquisition + subject matter expert algorithm + cloud processing = value. The entire platform from the mobile device acquiring data to the depth of the subject matter expert algorithm to the security and integrity of the cloud processing is carefully examined.
The QF management team goes beyond “testing” the technology and examines from the back end how the databases are writing data, how secure the server infrastructure and how truly unique/special the algorithms are written.
Our goal is not to de-value the startup, but to determine the level of the technology. Typically the state of the tech falls into one of the following 4 categories: Conceptual, Prototype, Development, and Production. Each of these categories is workable, but knowing precisely where the Intellectual property lives is paramount to proper due diligence.
Further, the QF examines the size and potentiality of the market from an outside analyst point of view. Our widespread media and industry contacts allows our team to receive objective analysis and data that defines the actual market potential as well as the existing players in a field.
With coding and applications becoming commodities, the unique and sustainable features and offering must be carefully defined and validated. The QF only invests in companies and startups that have defined their UVP and have demonstrated long term sustainability.
Startups by definition are difficult to gauge on milestones and operational metrics. Thus, the QF examines the founders’ history with their own personal financial management and assets.
If there are none to examine, we investigate company controls. What is the budget plan? Who is responsible for legal matters. How organized are the operations – proactive or reactive.
This answer is factored into the score of viability. We are attracted to founders that have done a lot with a little capital and respect the value of money.
If the investment opportunity meets the criteria above, the Quantified Fund presents a term sheet to begin legal discussions about valuations and terms of investment.
Our objective is to take a controlling interest in the startup; or have options to gain a controlling interest. Our minimum long-term investment in any entity aim to be 25%+ and include a formal board position.
