The idea sounds cool, but I want to have more transparency on how you chose those startups. Do they show a huge potential for future growth? How do their finances look like? Investing in startups is risky in general, but COVID-19 made it even more harsh. + some of those startups have many competitors in the industry and I would like to see more what competitive edge your startup selection has.
Hello! All the companies we selected have large growth opportunity given that their products are intended to assuage the harsh realities of COVID. All finances are published on the startup profiles and for most, this is their first money in. The XX mentor team is a founder community of 50 founders, each w/ several years of experience running our own companies, collectively valued over $4B. As with all early-stage startup investing, it can be risky, but our team's extensive operating experience gives us unique insight in to selecting the founders most likely to be successful. We often have more operating experience than most VCs. Additionally, companies across the world applied and the final cohort included a diverse contingent w/ 31% female and 47% PoC. These numbers are more diverse than you'll see in any venture portfolio and as it has been well established, diverse team outperform those that are homogeneous. Our global pipeline gives us substantial competitive edge. Finally, regarding competition, most companies have pitch decks that outline the market landscape and the founders are happy to answer Q&A on the Wefunder profile to help investors understand competition and other risks.
Yes for sure - you can read the story of all the founders, see their product and even their financials. XX invests in early stage founders and that's inherently risky but our thesis is that when founders are mentored by more experienced founders and are around other motivated founders, they'll have more likelihood of success. We've seen mentors and cohort founders go above and beyond for each other's success.
From my understanding, the SEC requires all companies raising through Reg CF have to provide financials statements that are reviewed by an independent CPA before the investors finalize their investments. I do agree, though, that there should be more overall DD--I personally would be hesitant to invest in a company if there wasn't a reputable lead investor (which not all Reg CF companies have).
Took the words right out of my head. Personally, I'd like to see some initial signs of traction/growth before I make any investments in a startup so unless XX is able to provide me with that kind of assurance (which can be done through a very thorough and transparent DD process), I'm not sure if I'll have the confidence to make an investment, at least not for now.
A $100 investment doesn't seem much and it's more like a kudos, but it is an investment. I agree that more information can help anyone determine better how to choose between startup A or B.
That's a good point, and it reminds me of the saying - don't invest more than you're willing to lose. I'm definitely open to making $100 investments, but I guess my question was more directed towards higher risk/volume investments that might beg for a more structured DD process.