Assessing Business Opportunities

The Brief

We were approached by a European venture capital firm that was in the advanced stages of making an investment in a digital content delivery start-up. The client wanted us to provide a second opinion on the target company and its market.

What We Did

Our assessment included:

• A detailed analysis of the company's product, business strategy and management. We already knew of the company and its market so this part of the project was carried out by an on-site visit where we had detailed discussions with the executive team;
• Review of rivals who operate in the same market. This included the identification of one company which was new to the client;
• Using Generator's proprietary PGDP digital media opportunity assessment framework, we were able to understand the competitiveness of the company's product offering as well as the company itself;
• A detailed bottom-up financial model was prepared which focused on the sales and marketing aspects of the business plan and, in particular, the time taken to convert prospects into meaningful revenue.

Results

We were able to transform the client's understanding of their chosen investment and its sector.

In particular, we were able to identify some significant issues with the proposed investment that related to a few unrealistic assumptions in the business plan and a mis-conception of the direction of the wider market. This resulted in changes being made to the management team and business plan.

We then carried out a follow-on project where we identified what we saw as the top-10 most interesting investment sectors in the market and provided a detailed investment rationale for each one. Based on this, the client is now actively looking to create a new company using an entrepreneur-in-residence program.