Press Release: Redefining Startup Ventures with AI-Powered Insight
**Press Release**
InsightStudios Presents: The Future of Startup Development and Investment
October 21, 2023
PALO ALTO, CA — Today, InsightStudios debuts its revolutionary Startup Studio, setting the stage for a new era in angel investing. Harnessing the power of AI, this studio aims to establish and nurture 150 promising startups, redefining traditional investment expectations.
Historically, early-stage startup investments have been somewhat of a gamble. Despite the rigorous due diligence, predicting a startup's success remained elusive. Angel investors often faced disappointment, hindered by the financial limitations of diversifying their portfolio. However, AngelList suggests that indexing into every credible early-stage deal could potentially optimize returns. “Our model shows with pre-seed and seed stage investments, investors would increase their expected return by broadly indexing into every credible deal, a finding that does not hold at later stages,” says Abraham Othman Ph.D., Head of Data Science at AngelList.
InsightStudios introduces an innovative approach, offering broad indexing with its startup studio model. For just $1,667 per month, accredited investors gain equity in 150 rigorously validated startups, all thanks to the proprietary methodology, Insight-Driven Iteration. Beyond its internal ventures, InsightStudios also taps into FounderDojo, their startup school platform, facilitating traction for external startups. Their hands-on engagement offers a data-rich foundation, fueling the predictive AI capabilities that outperform traditional investment methods.
Distinctive Features of the Startup Studio:
Cost-Effective Diversification: A groundbreaking model ensures diversification at a cost 99% lower than traditional routes, allowing investments as minimal as $1,667 per month for equity in 150 startups.
Advanced Predictive AI: The studio's FounderDojo AI delves deeper than mere business evaluation. Drawing data from founder-led experiments and personal attributes, it provides unprecedented insights, enhancing startup success predictions.
Higher Startup Success Rates: Outperforming many pre-seed funds and accelerators, InsightStudios emerges as the ideal launchpad for emerging startups that want to succeed more and fail less.
Proprietary Startup Deal Flow: The Studio offers unmatched access to a carefully curated startup pool that have achieved validation with Customers, ensuring top-tier investment prospects.
David Linhardt, Founder & CEO of InsightStudios, notes, "Our model is a game-changer, making angel investing more affordable and strategic. Our combination of cost-effective investments and AI-powered insights aims to redefine how startups are cultivated."
InsightStudios invites budding entrepreneurs to collaborate, aligning them with potential projects. Those with their own vision can benefit from the FounderDojo program, honing their customer-centric skills.
Potential investors keen on a diversified startup index should consider investing directly with InsightStudios, guaranteeing a complete focus on startup growth without any management fees or unnecessary costs or overhead.
Andy Stechter, an investor in InsightStudios, shares his experience: “The InsightStudios approach seemed too good to be true. But seeing startups flourish through the Insight-Driven Iteration process has been a truly rewarding journey."
"InsightStudios is more than just another accelerator," Linhardt emphasizes. "We view ourselves as a comprehensive startup school based on scientific methods that empower founders and investors alike to create more startup success."
The FounderDojo Basic Training plans start at just $500. Founders can signup now at https://FounderDojo.com/.
Investors can signup today at https://InsightStudios.co/invest to learn more and review the investment docs.
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**Frequently Asked Questions (FAQ)**
How is InsightStudios able to offer such a significant reduction in investment cost?
We can offer investors lower cost per startup than other options because of our unique startup studio investment model. Unlike typical founders that are developing one startup at a time, we develop multiple startups in parallel which allows us to gain cost efficiencies and spread the costs across multiple projects. In addition, we are conservative in how much money we put into our startups before generating evidence from Customers that they will pay for our products and services. This discipline keeps us lean and focused on building products and services Customers want.
What is the minimum investment amount?
The minimum investment is $20K, payable upfront or in four quarterly payments of $5k or 12 monthly payments of $1,667.
How accurate is the predictive AI in determining startup success?
We’ve tested our algorithm in a ten year pilot study with six externally created startup teams. We trained the founders in our Insight-Driven Iteration method during a 12-week period in person in 2013. After ten years, five out of six startup teams (83%) either exited (2) or were still running a profitable business (3) they created ten years later. This success rate is orders of magnitude higher than leading startup accelerators that typically have a funded-to-exit rate of 9% or less.
At the end of the course in 2013, the instructor used the algorithm to score each startup team based on their skills and the behavior exhibited during the course. In general, the algorithm looked at several factors including the founder’s ability to get insight from Customers and integrate it into their business model and other traits that indicate strong entrepreneurial DNA. When we reviewed the scores and compared them with actual startup outcomes ten years later, we discovered the algorithm accurately predicted the outcome for each startup team.
The study is encouraging but the sample size is small. We need to continue running experiments to improve the algorithm over time as we generate more data points by working with more founders and more startups. In our view, it’s possible to predict pre-seed and seed-stage startup outcomes if you have the right data the right algorithms.
What sectors or industries will the 150 startups cover?
We focus on startups that leverage information technology, including software, data, AI and ML models.
Why would a founder build a startup with InsightStudios versus building a startup on their own?
InsightStudios provides seed funding and entrepreneurial support that founders sometimes have difficulty acquiring on their own. As the founder develops a business that is further along, at Series A stages or later, there are resources available if the founder is working in a desirable sector. However, support at the concept and pre-seed stages are not readily available. InsightStudios fills this gap by providing founders with support, collaboration and a safe place to create their next business. The support we provide helps improve the odds of startup success.
How do investors get their money back?
Investors in InsightStudios will generate returns when our startups generate liquidity events. InsightStudios, LLC is designed to operate at a lost as it generates operating expenses required to develop companies from zero to one. The cost basis and operating losses are offset against gains from the sale of the companies we develop and invest in.
What is the legal structure of InsightStudios and the equity investments investors make?
InsightStudios, LLC is a Delaware LLC. Investors that invest in InsightStudios invest in a priced round based on current value of it’s startup projects and businesses. When a project achieves sufficient validation with Customers, we create a spin out entity. The spinout entities are Delaware C-corps. We transfer the assets from the project into the new entity. InsightStudios investors automatically receive prorata shares in the newco based on their current stake in the InsightStudios cap table at the time the newco is created. Investors are not required to put in additional capital to get their prorata shares in the spin out companies, but they may choose to invest more capital if they prefer to do so.
How does InsightStudios select its founders and ensure underserved groups and minorities are adequately represented in its selection process?
InsightStudios leverages its FounderDojo business to engage with external founders that have ideas and are actively working on their startups. FounderDojo Basic Training does not vet founders. Therefore, we don’t have any biases in our selection process. The FounderDojo program is a pay-to-play startup school where anyone who pays the tuition fee can participate. So, if any founder can scrape together $500, they can be part of the FounderDojo Basic Training program.
How does FounderDojo help founders?
FounderDojo Basic Training teaches founders one critical skill that is required for startup success - how to get insight from Customers and integrate it into the business model. We’ve observed founders that can master this skill dramatically improve their odds of startup success.
What’s the relationship between FounderDojo and InsightStudios?
FounderDojo was developed as a startup within InsightStudios so we could help entrepreneurs outside of our startup studio find startup success. FounderDojo may some day be an independent entity if it achieves a sufficient level of Customer validation.
In which markets does InsightStudios operate?
InsightStudios is a virtual startup studio and FounderDojo is a virtual startup school. We are considering creating a physical location in metro area in the US that is startup friendly, but that decision has not been made at this time.
How do startup founders apply to be part of the studio?
Experienced and aspiring founders can signup on our website at https://InsightStudios.co/.