MANY INVESTORS LACK AN OPPORTUNITY ANALYSIS FRAMEWORK
The more we studied this issue of high failure rates, the more we realized that there wasn’t a good framework or construct for analyzing an opportunity. Most decisions and business due diligence were simply ad hoc. We saw this in the Fortune 500 world, the venture capital investment industry, the investment banking industry, the M&A process, and with startup entrepreneurs. There is often a lack of process discipline around what to analyze and how to objectively measure opportunities to assess its probability of success or failure.
Over the years we’ve read thousands of business cases in business school, thousands of news stories about business, and thousands of business plans. And we’ve advised hundreds of businesses, from rank startups to Fortune 500 clients. We’ve also invested in startups, launched many businesses, and acquired quite a few others. So we went on a journey of discovery and analyzed everything – what went wrong and what worked well in all of those different situations.
What we discovered was that in most cases, the outcome of a particular opportunity was completely predictable. No matter how much entrepreneurial energy, no matter how much optimism, and no matter how many hours of effort poured into an opportunity by a high-quality management team, if the business model was fatally flawed, the opportunity failed.
As it turns out, there are many core principles at play that can be identified and measured to predict success or failure and used to vastly improve an opportunity once the weaknesses are known. In response to this issue, Eagle Venture Fund analyse 50+ proven principles ranging from the market dynamics to the financial characteristics to the operational characteristics to the offering itself to the customer relationship – all of which can be used as a tool to measure and assess any business opportunity.