One startup is born every minute, according to the UK government website. Just over half of startups fail in their first five years, yet in challenging times that can increase significantly, posing threats to the economy.
It is at these times quick access to funding becomes critical. With the disturbing statistics showing underlying prejudice determining who that funding goes to, companies are turning towards artificial intelligence and automation to mitigate bias.
According to the VC and Female founders report, only 1% of venture funding goes to female-led startups. One-third of female entrepreneurs say access to funding is their most significant barrier. Ethnic minority-led businesses are hit even worse, with only 0.24% of venture funding going to black entrepreneurs and 0.02% to black female entrepreneurs.
Providing data-led funding based on investibility
Although there is much work to be done to resolve data bias, automation can reduce instances of discrimination.
The £5m Boost Fund I, set up by Capital Pilot, aims to improve access to funds based purely on the business model of the applying startup. The investment fund seeks to provide quick funding to neutrally selected startups throughout the UK using Capital Pilot’s Investability Rating System.
They state, “The Boost Fund is a unique investment opportunity for founders who don’t have fundraising experience or a ready-built network of potential investors. Capital Pilot is committed to helping underrepresented founders and regions of the UK, so we’re here to help you grow your business.” Backed by a group of high-net-worth angel investors, they are planning to make fixed £50,000 investments to successful applicants.
Applicants can submit their business details and funding requirements in an online form consisting of 31 questions. This, along with a PDF of the company’s investor presentation and the financial forecast, is sent for assessment. After 7 days, all applicants receive a report and rating, and those who are successful are said to receive funding within a week after receiving their rating.
Applicants receive a rating and investability report, whether successful or not. Those who aren’t successful are encouraged to tweak their business and re-apply. Testimonials of applicants describe the reports as personalized and detailed, despite the quick turnaround of the application.
The approach looks to speed up the investment process, and the fund aims to be the leading UK startup investment fund by volume as it targets to complete 100 investments in less than six months. Already, they have announced their first five investments.
Frictionless customer experience and enhanced KYC
Capital Pilot recently partnered with the global verification platform, ComplyCube, to provide KYC verification. Through their automation strategy, they speed up the application process and allow the Boost Fund to realize their mission to provide quick access to funding.
Richard Blakesley, founder and CEO of Capital Pilot said, “The Boost Fund I is up and running with a strong mission to promote greater diversity in capital allocation to startups. Thanks to ComplyCube, we have established strong AML controls that meet the most stringent regulatory requirements, ensuring our compliance posture is first-class”.
ComplyCube is known to be a leading SaaS & API platform for Identity Verification (IDV), Anti-Money Laundering (AML) & Know Your Customer (KYC) compliance. They are said to provide the fastest omnichannel integration turnaround in the market with Low/No-Code solutions, API, Mobile SDKs, Client Libraries, and CRM Integrations.
Also focused on boosting startups, the company has expanded its Startup Assistance Programme, granting qualifying startups allowances of up to £40,000. As well as this, they offer early-stage and growing startups free identity verification checks and other resources to enable frictionless user journeys.
“We’re excited to partner with Capital Pilot and ultimately support its mission to promote greater diversity in capital allocation for startups,” said Dr. Tarek Nechma, CEO of ComplyCube. “We strongly believe startup enablement is core to the success of modern economies.”