Problems Facing AndFound
The given case focuses on discussing AndFound start-up, the paramount aim of which is to connect investors with new and ambitious projects. Initially, the mentioned website offered its services for free, while its founders plan to introduce some charges for investors and other interested businesspersons (Nanda and Kind 145). The key problem facing AndFound is that the above target audience may be confused with charges, thus stopping to use the website. With time, the founders of the identified platform created a great database of investors and start-ups, which presented an attractive place for the connection of entrepreneurs. While several revenue models were developed by AndFound, there is still a major concern regarding how to manage and enhance tools, instruments, documents, and databases to make the service more value-adding and cost-efficient.
There are four strategic options for the given case. The two of them are expressed directly by the company and focus on beginning to charge their broker-dealers and venture capital (VC) funds, respectively. If the former option implies investing in micro VC funds, the latter would enable investors to design VC funds and pay a percentage on returns. While the advantage of each of the mentioned options is the preservation of the target audience, the volatility of VC is their weak point.
According to Kevin Laws, the COO of AngelList, monetization can alienate entrepreneurs from using AndFound. Instead, to raise money, it is essential to find investors, who would support the mission and vision of this service and support its development (Nanda and Kind 148). At the same time, some of the offerings provided by AndFound may be monetized – The talent portal, for example. The key advantage of such an option is that it would promote customer loyalty and satisfaction as well as monetization simultaneously. In their turn, more transactions between investors and start-ups would be performed.
The second option suggested by an angel investor, Jennifer Lum, refers to understanding customers’ willingness to pay for the services offered by AndFound. The above contributor considers that both of the outcomes are possible. Namely, customers may abandon paying charges, and they may also express consistency with the company’s intentions (Nanda and Kind 149). The attitudes may be collected by different means such as requests for providing feedback or conducting experiments. The main strength of the mentioned option is that it allows retaining customers and learning more about them to come up with the best solution to the problem. However, it may turn out that entrepreneurs and investors have no wish to pay charges, while the urgent need for resolving the problem would remain.
What Should They Do?
Based on the presented options, one may recommend implementing asset management for working with VC investors. Such an approach is likely to allow AndFound to determine the value of intangible assets in the form of a new approach to monetizing the service. While some of the offerings may remain free, some others may be adjusted to charge an adequate fee. It is also rather essential to pay attention to the fact that investors clearly understand their roles and responsibilities and that the website’s development strategy may be changed in the course of the collaboration. The search for investors and close cooperation with them should be based on VC funds and broker-dealers. In other words, it seems to be the best solution to integrate several options in a comprehensive approach to the given problem.
Nanda, Ramana, and Liz Kind. “Case Study is a Start-Up’s Strength Becoming Its Weakness?.” Harvard Business Review, 2015, pp. 145-149.