FAQ for Startups: Getting rated by Early Metrics
By Early Metrics Team - 07 September 2020
What does it mean for a startup to get rated by Early Metrics? And how can you as an entrepreneur benefit from this process?
If you are looking to go through the Early Metrics startup rating process, we highly recommend you watch this video and read the FAQ below:
You benefit from free exposure to our clients (which are industry leaders like Moët Hennessy, L’Oréal, Vinci, Servier…) in order to establish technical and commercial partnerships or raise funds. You also benefit from an external and objective analysis of your project from an experienced VC team. Finally, being rated by Early Metrics is also an excellent means to gain visibility for you, given that you can use it as a communication tool.
Early Metrics' discussions with the entrepreneur are governed by a confidentiality agreement (NDA) that allows the startup to accept or not, at the end of the process, the disclosure of the rating to our customers. Indeed, you will have 5 working days after reception of the e-mail announcing the rating to let us know if you wish to be presented or not. It should be noted that this rating reflects the growth potential at a given moment in time, and we can perform another rating after 6 months if a client deems it necessary.
Our 1h-1h30 interview is based on 3 pillars, which are the management team, the project and the ecosystem. We then define 30 criteria, that are mainly extra-financial and qualitative, to evaluate your company’s growth potential. In order to keep the greatest objectivity in the answers and the most efficient process, we do not divulge the questions beforehand. During the interview, we list several of the criteria we evaluate, so that you can provide us with relevant information as needed.
During the rating interview, we discuss 3 pillars: the management team, project and ecosystem. Prior to the interview, we will ask you to fill an Excel Document where you will need to share basic information about your company (core development dates, the HR structure, financial projections, the cap table, etc.). You will also need to provide us with a presentation document and sign an NDA that protects our discussions.
Our discussions are protected by a confidentiality agreement (NDA). We won't share raw information (or pitch deck, or excel file) with our clients or communicate publicly about the rating delivered. What we deliver to our clients is an analysis of your project. Based on the information you’ve provided, we will put together a rating report that sums up our 3 pillar-based analysis.
Our goal is to make the process as time efficient as possible for you. The entire process should take you between 2h and 2h30. Before the interview, we ask you to fill out an Excel spreadsheet, which should take you around 20 minutes. Then, the interview lasts between 1h15 and 1h30. Lastly, after the rating announcement, we offer you the opportunity to have an optional feedback calls with the analyst, which usually lasts around 30 minutes.
Early Metrics works with about 20 different industries. Our methodology is adapted to the different markets and levels of startup development in each one of them. In addition, our analysts are specialised by sector and we typically assign an analyst to a startup’s rating based on their expertise in the sector or topic covered.
We've rated over 3,500 startups to date, so we are able to compare your startup to companies with the same level of maturity. This allows us to give an overview of your positioning in relation to your peers.
We apply our backtesting methodologies that consist in tracking the survival and growth of all the rated companies, one, two and three years after the initial rating. These results are then statistically processed to continuously improve our methodology and criteria coefficients. This backtesting has been co-developed with one of our scientific partners: the Cnam (Conservatoire National des Arts et Métiers). As of today, 83% of the companies placed in the top 20% of our rated startups have experienced fast growth two years after the rating.
We consider that our mutual interest is to present a startup to a maximum of our interested clients (those who have expressed an interest in your value proposition to us), to give you access to our portfolio of corporate clients and create more opportunities for you. However, if you don't want us to present you to some of them, or if you only wish to be presented to one specific client, you can specify it at the end of the rating process, and you won't be presented to other companies.
It is difficult to give a success rate because it varies a lot based on the rated startup’s sector and our contact within our clients’ company. This is made even more challenging due to the fact that we do not take commissions on potential partnerships or investments that take place thanks to our rating. As such, we are not necessarily informed when concrete collaborations between the rated startup and the client occur.
Our sourcing product is made to help our clients discover new startups. Sometimes, some are already in contact with them, but the rating may be beneficial given that it can accelerate negotiations with our clients, who already know our process.
Our rating process is free for startups. It's the corporates and investors that pay for our services (without any success fee to ensure independence). We help them identify emerging tech trends and find relevant innovative startups in order to rate them.
At the end of the rating process, we ask entrepreneurs to fill out a quick online survey about the process. You can find some of their testimonies on this page.
It’s important to keep in mind that our rating represents a snapshot of your company on the date of the interview, which is something our clients are also fully aware of. As such, we consider the rating viable only 6 months. After six months, we can perform another rating of your company to provide up-to-date information, if a client expresses the need to do so.