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History of the Gauntlet
Global competition is increasing and UK based businesses have to compete through their innovation and entrepreneurship. It is the Government's vision that the UK will become a key knowledge hub in the global economy. To accomplish this, the UK must not only maintain its pre-eminent position in the advance of scientific and technological knowledge, but also turn that knowledge into exciting and novel products and services that customers want to buy.
Young innovation companies are seen as the drivers of that transformation. Yet, not enough young UK innovation companies receive the venture capital they require, not because of some 'funding gap', but because they do not meet the standards for venture investment: they are not investment ready. Thus, investment readiness has become the critical roadblock, holding back the UK economy's transformation.
Library House, through its ongoing research into thousands of young innovation companies, observed that these companies only developed the understanding of their shortcomings through the process of trying to raise investment. Running the gauntlet of the investors, they became aware of their shortcomings based on the questions they encountered and the feedback they received. Only then were they in a position to make themselves investable, which was frequently too late. In short: The process of failing to raise capital provided the roadmap to make them investable but only after they needed the capital.
Clearly, the challenge is to help entrepreneurs get smart before the event and not wise after it is too late.
Library House teamed with the London School of Economics and Political Science (LSE) to address this challenge by creating 'The Gauntlet', a web-based self-assessment service that enables entrepreneurs to measure themselves across the 16 key criteria against which an investor will question them. By running The Gauntlet, entrepreneurs can learn how investors think before they meet the investors. Importantly, they can run The Gauntlet as an integral part of the development of their business at any stage prior to that critical first meeting with an investor. In many companies, we envisage that The Gauntlet will be applied as an essential learning and communication tool for the benefit of the entire team.
Library House and the LSE spent one year and over 10,000 hours researching best practice amongst successful venture investment firms and reviewing current commercial and academic assessment models from which a methodology and system has been distilled that interrogates innovation companies structured around 16 investment criteria. These 16 areas are organised around 4 key themes: the Innovation, the Team, the Market and the Investment. Gauntlet users will answer questions in each of these 16 areas and be provided with a wide range of educational resources to support them with their responses. At the conclusion of The Gauntlet they will receive a Report Card assessing their investability in each of the 16 areas with detailed feedback to support the assessment.
The educational resources include:
- Video interviews of successful entrepreneurs and world-class investors
- Case studies exemplifying each assessment criterion
- 'Top Tips' (dos and don'ts) for each assessment criterion
- 'Roadmaps' demonstrating how others have got started
- Recommended books and websites
- Original footage from the recent BBC TV show "Dragon's Den" showcasing entrepreneurs failing to answer the key questions successfully.
These educational resources provide the entrepreneur with the tools and materials to understand the investors' criteria, answer the questions and position them to develop themselves and their business successfully.
The Gauntlet describes the DNA of a successful venture. By learning from the mistakes and successes of a large number of entrepreneurs, this original and valuable source of knowledge combined with a detailed exploration of the entrepreneur's own business, enables those that run The Gauntlet to transform their innovation into an investable business.
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