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What problem does your solution solve?
In today’s world, everyone is looking toward being their own boss. Big businesses are being removed from the spotlight to make way for smaller, garage-based startups. But, for most individuals, there is one big impediment that barricades them from making the switch out of the corporate world and into the world of entrepreneurship. That barrier is investment capital.
It's common knowledge that investors do not take a second glance at a business plan unless the entrepreneur is introduced to them by a contact. In today’s world of infinite startups, entrepreneurs must rely on their network and geographical location to receive the funding they need to execute their ideas. This severely limits the capacity for investors to hear about groundbreaking ideas. Even when investors do hear about these ideas, the proposal may not match with the investor’s interests or philosophy. Our mission is to build a portal that connects entrepreneurs with credible investors regardless of geographic barriers.
What’s the market potential for your solution?
InnoVC's market segment includes organizations and individuals who are looking for funding from venture capital firms and angel investors.
Who are your customers?
InnoVC has a two-stream revenue model. The monthly subscription fee, which would ideally account for 20% of total revenue is paid in small amounts by startups and startup owners. The brokerage fee, ideally accounting for the other 80% of revenue, is a cut taken from the money transacted by the investor to the entrepreneur. As a B2B and fintech company, the ratio between our revenue streams is a valuable metric in comparing the number of users to the number of users that our company has created value for.
How will you reach your customers?
Our go-to-market strategy includes free sign-ups for investors/lighthouse customers six months before we launch our web app. The ideology behind this is that if we have a strong pool of investors, entrepreneurs will join the platform. And if entrepreneurs sign-up, so will more investors. The free sign-ups to lighthouse customers are offered to kickstart this symbiotic relationship.
How will you make money?
As I stated earlier, InnoVC has a two-stream revenue model: a monthly subscription fee and a brokerage fee. Based on the Pareto principle, we are striving for an 80/20 balance between the brokerage and subscription fees respectively. Although the majority of our users will only end up paying the minimal subscription fees, a few of our users who transact on our platform will pay the brokerage fee. For example, let's say a user is on our site for 12 months. For each month he may pay a $10 subscription fee. After 12 months, let's say he finds a VC willing to give him $100K. InnoVC takes 7% of that amount, resulting in a revenue of $7120 with one customer over the course of a year.
What kind of partners will you need to make, support and distribute your solution?
InnoVC needs partnerships with security experts and web developers to maintain our site. Additionally, we need partnerships with banks and venture capital firms to be able to transact money smoothly. InnoVC faces many of the same issues as online banking, so keeping money and IP secure is of utmost priority.
Who is your competition and how do you differ?
Connecting entrepreneurs with investors is an issue that has risen to the forefront of the startup community recently. However, most organizations trying to solve this are taking the crowdfunding and crowd-investment route. Companies like GoFundMe, Indiegogo, and Patreon are leaders in the crowdfunding market. An entrepreneur can make some one-off cash through crowdfunding, but ultimately, he or she lacks the resources and support they need to make that money grow. At InnoVC, we want to encourage traditional entrepreneur-investor relationships. Relationships that can provide the network, support, and resources to make a little money grow into a lot.