The first public Due Diligence report
The results of the first public startup evaluation
Rocket DAO team is glad to announce that finally we have completed the first public startup evaluation procedure based on the methodologies developed by our expert community.
Finalizing the work being done we have prepared an evaluation report which all startup will receive as soon as they pass a due diligence procedure conducted by the decentralized expert community on our platform. Information presented in the report allows us to create a pitch deck and a detailed business plan as well.
Here is the public DueD report of Multy — an open-source multisignature wallet for Bitcoin and Ethereum cryptocurrencies and ERC20 tokens.
The key purpose of Rocket DAO is to develop an infrastructure where quality startups will have all the necessary tools for more easy-going communications with investors; at the same time, the quality of these startups will be guaranteed by experts who will evaluate and accelerate these projects.
Public Due Diligence standard
- The structure of the report we have prepared will be used as a standard and typical structure of the Due Diligence report on our platform:
- The first page is a onepager containing a brief summary of the project: product description, problem-solution, market, investment round, key team members and so on.
- The most important financial metrics are placed on a separate section, these parameters include EBITDA, operating profit and total revenue, ARPU, WACC, capital expenditure and some more.
- Evaluation criteria of each parameter are highlighted at the beginning of the specific business plan sections, where one can find the links to methodologies and their authors.
- Components of the evaluation parameters are explained and supported by expert comments at the end of the evaluation sections.
- Links to the documentary proofs to startup answers are provided along with the answers to expert questions envisaged in the evaluation methodologies.
- Analysis of completeness and reliability of the data is available at the end of the document.
- Recommendations to startup teams on each of the evaluation criteria are prepared by experts and included in the report.
- And finally a glossary of the most complicated terms and abbreviations one can find in the report as well.
The purpose of the public Due Diligence
Working on the DueD report we set a goal not only to demonstrate to our stakeholders a sample of the expert community work results but also to:
- Assess if expert methodologies are understandable and adequate enough for real practical use.
- Correct and specify the questions that startups are to answer.
- Verify startup evaluation criteria on each of the parameters, and change them if necessary.
- Check if it is possible for a startup to provide all the required documentary proofs.
- Develop step-by-step instructions letting valuate startups depending on the business model chosen.
- Assess the adequacy of quantitative evaluation of each parameter.
- Ensure simplicity and linearity of the steps of the business preparation and evaluation.
Evaluation procedure
As a result of this test evaluation:
- Experts made necessary changes in their methodologies
- We described the process of further evaluation automatization
3 Multy team members were actively involved in the preparation of the necessary materials: CEO, CTO, Director.
7 Rocket DAO experts conducted DueD (7 experts for 10 parameters, as two experts are the authors of two methodologies at a time). For the first test evaluation methodologists and experts were the same people. We chose such an approach as we believe that methodologists should first test their own methodologies on real startups and make conclusions if everything is taken into account. At the next step of the expert community development, we will attract new experts who will use original methodologies.
The report of the first public Due Diligence is here.
Evaluation approach
Our approach is different from the ones available on the market as:
- Evaluation was conducted using in-house methodologies developed by a decentralized Rocket DAO expert community rather than by Rocket DAO team. All these methodologies were approved and accepted by this community. Evaluation criteria are available online, so anyone can easily figure out why this or that scores were given to any parameter.
- Information provided by a startup is public and proved with relevant documents or links to researches (except for the cases when a startup requires not to publish its DueD). Reliability of the information is confirmed by experts who conduct evaluation.
It means that the information our platform provides potential investors with is not only well-structured but also reliable.
We hope that our solution will increase the quality of the decisions made by investors and cut down the level of the information noise. At the same time, it will reduce the uncertainty that startups face developing business plans for investors, this will let them on more relevant information that truly interests most investors. Having a detailed plan with specified criteria for the good business plan clarifies founders’ perception and understanding of their own business (in some sense it can be called acceleration).
What’s next?
At this very moment, we are working on the automatization of the evaluation procedure and Due Diligence report development.
Share your opinion on the ways we could improve current evaluation system, join our expert community or apply for a Due Diligence mailing us at [email protected].
Best regards,
Rocket DAO team.
We evaluate startups and introduce them to investors.
Authors: Andrew Miroshnichenko, Angelina Dmitruk
Website: https://rocketdao.io/
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