R & D
Breakthrough Developments at PredictionWorks
Our company has created an objective, data-based analytic system (Our Venture Assessor) that determines if a new technology company will likely succeed or fail. Our assessor has been subjected to two double-blind tests, including one at a major university, as well as several actual assessments for the purpose of forward investment screening.
In testing, our Assessor was able to predict, with over 90% accuracy, whether a new venture will likely fail, or succeed and bring a profit to its investors
And all this before venture capital is deployed, substantially reducing the risk of investment.
Proof of Concept:
We’re not the first to finally use measurable, empirical data to analyze potential start-ups, but we are the only process we know of that has been scientifically vetted with two independent double-blind tests (n=19), as well as hundreds of actual evaluations of critical planning elements with real-world companies.
Our initial test results have been sensational and very exciting
In our first double-blind test by a major Silicon Valley VC law firm, actual company business plans and data from ten real-world start-ups, stripped of all identifying information, were subjected to PredictionWorks sCORETM analysis. The critical parameters of the PredictionWorks test was that we were not permitted to use any test subject company data beyond the date of their business plan.
In 2009, the Company was introduced to the Silicon Valley law firm of Wilson, Sonsini, Goodrich, & Rosati (WSGR). WSGR proposed that the Company’s New Venture Assessor be double-blind back-dated tested. WSGR wanted to know if the Company’s claims of predictability and reliability were valid and if so, how valid. In conjunction with the international consulting firm, Hitachi Consulting, WSGR conducted and monitored 10 separate double-blind back-dated tests using 10 fully funded start-up business plans. The protocol and details of the tests are included in the Test Results and Full Report.
Achieving these unprecedented predictive accomplishments was the result of a strong vision during a decade of research, development and testing. Our final algorithms and formulas finally promise an end to the dismal hit rate of venture-backed start-ups.
We successfully predicted the viability of these investments with a whopping 100% accuracy: 10 out of 10
With this stunning outcome, we decided it was essential to re-test under even more stringent and broader oversight. PredictionWorks then brought its system and its acumen to the prestigious McCombs IC2 Institute at the University of Texas School of Business at Austin, to be independently tested using double-blind scientific methodology.
Another group of companies (N=9) were tested using similar protocols and scientific controls. The results: This time, we correctly predicted—with 90% accuracy—whether investors would have a high R.O.I. The only fault in our predictions was that one company we thought would fail, broke even, returning their investor’s outlay without loss.
In September of 2016, the University of Texas McCombs School of Business and IC2 Institute of Austin monitored and managed 9 blind, back-dated validation tests on the Company’s New Venture Assessor System. 9 fully-funded start up business plans were assessed. The test conditions and protocols were the same as those used during the Company’s validation tests undertaken earlier in Silicon Valley under the monitoring of Wilson, Sonsini, Goodrich, & Rosati and Hitachi Consulting. The protocols and details of the tests are included in the Test Results and Full Report.
Achieving these unprecedented predictive accomplishments was the result of a strong vision during a decade of research, development and testing. See “What we have Developed.” Our final algorithms and formulas finally promise an end to the dismal hit rate of venture-backed start-ups.
Had these two studies been conducted prior to these real-world start-ups being capitalized by the old “gut instinct” method, hundreds of millions of investors’ dollars would have been saved.
The implications of these early tests of our Venture Predictive Analytics are very impressive. They indicate that PredictionWorks and the sCORETM analytic process could theoretically improve the Angel and VC process from its unremarkable 10 to 20% success rate to what we believe could be 30 to 60% or better.
Venture vs. Visionary Way
Rates of Return
To learn more about LabX Ventures, Venture Science, or our New Venture Assessor (NVA) Tool