90 What matters most when rating companies for venture capital investment with Richard Blakesley of Venture Cubed

The EIS Navigator

Assessing companies for venture capital investment is often more of an art than a science. Richard Blakesley is trying to change that with Venture Cubed. Its rating system aims to objectively assess how investible new companies are. We asked him to talk about how they built their rating system, what it tells us about the venture industry and how it might change it going forward.

We had such a good discussion that we have split it into two parts. In this episode, we discuss how he measures companies. In the second part, we talk more about the wider industry. Here we discuss:

• what their rating system aims to measure
• how they assess how good the ratings are
• what are the important factors in the rating
• the weights that are given to those factors
• how they quantify factors that are more qualitative
• the challenges in analysing financial models
• where founders don't understand what investors want
• how founders can get good advice on fundraising
• the process of giving feedback to founders and how receptive they are
• the mistakes that founders often make
• the proportion of companies that are really investible
• what investible really means
• where funding gaps are

As you can see, we covered a lot of ground. Whether you are an investor thinking about how to assess companies or a founder considering fundraising, there's a lot for you here. And don't miss part 2!

01:00 Richard Blakesley introduces himself

02:20 What Venture Cubed does

03:45 What are Venture Cubed scoring? - investibility

06:00 How he measures the success of ratings

09:25 What are the most important factors

12:20 How they quantify qualitative factors

14:20 Issues are around bias in interviews

18:10 Assessing companies without interviewing management

19:00 How founders often don't understand the desires of investors

22:00 Getting good advice on how to fundraise

26:30 How founders get feedback from the rating process

30:20 The receptiveness of founders to feedback

32:45 What mistakes do founders often make?

38:50 How does Venture Cubed weight the factors?

42:40 What proportion of companies are investible?

45:15 How many companies get funding that deserve it and what's the shortfall in companies not being funded that should?

Links

Venture Cubed website - https://www.venturecubed.com/

Richard's email: [email protected]

Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen

Bio

Richard Blakesley

Founder & CEO, Venture Cubed

**tbc