A tool has been introduced by Canadian alternate lender Clearbanc that claims it can tell start-up owners how much their venture is worth in 24 hours, speeding a process that will typically take many week or months.
This product, dubbed Valuation, uses AI and data to conclude a valuation for the startup, such as sales and expenditures. Entrepreneurs can also recognize prospective customers or partners and, under a revenue-sharing arrangement, participating firms can also obtain financing from Clearbanc.
Clearbanc CEO and co-founder Andrew D’Souza defined the software as a combination of Credit Karma, which produces and records credit ratings over time, and a Tinder that ties entrepreneurs with investors and buyers.
“The aim is to even up the playing field a little bit to provide entrepreneurs with more knowledge not only to satisfy an investor or customer, but to run a business on a regular basis to satisfy their targets,” he said. “It presents us with a framework for setting a benchmark and then a target, then a roadmap.”
Clearbanc designed the platform, D’Souza stated, by reviewing public and private data and studying what transactions had been made in the past. The more details the founders submit to the tool, the more specific the calculation would be.
This new tool reaffirms Clearbanc’s goal of distributing capital to entrepreneurs who would otherwise have been unable to access it, said Michele Romanow, chairman and co-founder.
“That’s the same thing, revolutionizing the access and value of capital and this data,” she added. “Everyone with a brilliant idea must be able to access resources, [and] person who understood the money, in the right circles it wasn’t difficult for the people.”
In a research process, Valuation was used by thousands of businesses on the market with a cumulative overall value of over $32 billion, the firm said. Until now, Clearbanc has linked more than 60 firms to venture capital investors.