Case Study: Worth the Risk? (Venture Capital)

Case Study: Worth the Risk?

The Problem

The investment team at a venture capital firm was considering an investment in a higher education technology company. The company had several potential investors and was close to signing a term sheet, so the venture capital firm needed to quickly evaluate the opportunity and decide whether the investment was worth the risk. They understood the company’s product offering and value proposition, but were unclear on the broader competitive landscape and market opportunity.

Critical Issues

Purchaser Perspectives    Short Diligence Window

The Solution

Within one day Maven delivered dozens of experts in higher education who had first-hand knowledge and perspectives relevant to the venture capital firm’s research. The professionals identified by the Maven platform included psychology and learning development researchers, ethicists, college classroom instructors, university directors of information technology, and administrators. Over the course of the next three days, the customer conducted twelve Telephone Consultations with selected Mavens. In the process they learned of several serious issues with the target company’s intended market as well as two previously unidentified competitors who had better technology and more exciting offerings.

In addition, one of the conversations went so well that the venture capital firm decided to retain the consultant through Maven to assist with their ongoing higher education technology research. Based on the insights gathered, they determined the original company of interest was not the right investment, opting instead to approach one of the competitors they had identified to inquire about potentially investing. With the help of the advisor a month later they completed their discussions with the new company and successfully invested in it.

“Over the past two years Maven has become an vital part of our research and due diligence process, but this experience took it to whole new level. We were going to roll the dice on this company because everyone else was so excited about it, but Maven helped us to make a more informed decision. Not only did we avoid a bad investment, but we found a great alternative AND a trusted advisor to help lead our future efforts in this space!” – Venture Capitalist


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