History offers many examples of successful projects that became million-dollar companies but it does not record a wealth of ideas that do not work. Ruslan Tymofieiev (Ruslan Timofeev), the founder of venture capital fund Adventures Lab, explains how investors evaluate projects and the risks of investing in them. They focus on the uniqueness of the idea, management system of the project, developing and scaling potential. 

A comprehensive review of the project seeking funding starts from legal expertise. Ruslan Tymofieiev says it includes checking whether founders of similar projects worldwide hold patents or other kinds of intellectual property protection. At this stage, the main task for investors is to ascertain whether the founder of the startup can get the copyrights. Such measures minimize further legal risks and problems.  

Comparison with other similar projects is important to prevent mistakes. Tymofieiev adds: “Sometimes, it happens that some factors cannot be eliminated at all. Then, it is better to study the negative experience and transform the project to minimize the negative impact.” 

The next stage of the analysis is marketing expertise. Investors audit the startup’s financial plan and competitors` presence, a strategy of a product launch, and attractiveness of an MVP (minimum viable product) on the market. They take into consideration the mentality and behavior, preferences, and fears of the target audience. Such steps help prevent non-recovery of the investment.

On the stage of scientific and technical expertise, investors check whether the idea of the project is innovative and fresh, meets the needs of the target audience, and solves an urgent problem. The technical team audits the startups` technologies: they verify the code and software architecture, assess internal processes.

Ruslan Tymofieiev explains thatthe founders always praise their product, call it unique, innovative, and capable to revolutionize the industry. “The reality often turns out to be much more prosaic. The scientific and technical expertise allows us to determine how much the project really meets modern trends,” he says.

Another important point is the project team. Analysts of Adventures Lab prioritize founders` expertise and experience over the startup itself. They believe that a good leader can build a strong community of managers, a solid team reasoned and fueled for success. With a good leader, a team can work hard to take their product from ideation to creation stage. In other words, the personality of the founder is the projects` competitive advantage to obtain funding.

Note: Venture capital fund Adventures Lab was founded by Ruslan Tymofieiev in 2019. The fund provides investment support to promising startups in the early stages. Adventures Lab systematically invests in IT projects related to marketing, education, and video technologies. One of the most successful projects to be mentioned is the Ukrainian startup Reface.