Cocoon Capital: Using F4S

Goals:

Invest in high-potential founders in tech startups across Southeast Asia and achieve a financial return for Limited Partners (LPs).

Who:

An active, early-stage venture capital firm that invests in enterprise and deep technology across Southeast Asia. They allocate substantial time to each new company post-investment, by only doing up to 6 new deals per year.

Website: https://cocooncap.com/
Industry: VC
Employees: 1-10

The challenge:

‍As an early-stage venture capital investment fund, Cocoon Capital is no stranger to high risk. Globally, 95% of startups fail (Crunchbase insights), and with little data to assess the level of risk for the investment, it is challenging to predict which startups will succeed.

Cocoon Capital invests in only six companies per year, meaning each pick must be spot-on. The team sought a data-driven way to minimize risk and maximize return on investments.

The solution:

‍F4S provides benchmarking analytics based on over 20 years of entrepreneurship research. The tool immediately identifies blindspots and predicts success rate by comparing data to the entrepreneurial Success Factor Model. This data equips Cocoon Capital with insights on potential and actual investments and recommendations on overcoming blindspots.

The result:

‍F4S gives the Cocoon Capital investment team a methodology to help identify and coach the early-stage founders they invest in, granting them a strong awareness of team bias and interest filters. Several portfolio companies have also adopted F4S as a tool to understand their culture and help their employees reach their full potential.

The future:

‍Cocoon Capital uses F4S as a predictive people analytics tool as part of the investment due diligence process to know upfront the potential blindspots and investment risks of the startup companies they invest in.

Why F4S:

Collects and builds consistent founder data points to compare and research over time, including the growth of startup founders and how they make decisions
De-risks investments as a cutting-edge due diligence and portfolio management tool
Helps the Cocoon investment team better mentor founders and their teams
Gives a value add to the Cocoon founders by introducing a useful tool to help them scale and grow
F4S helps Cocoon develop its own ‘Success Factor Models’. With it, the team can identify shared attributes among the founders who successfully exited, fundraised later rounds or failed.