TABS Answers the Most Frequently Asked Questions: FAQ Series 1
By: Tabs Group
Tags: Startup, Investing, Fintech, Venture Capital, Finance

By Amarins Laanstra-Corn | Marketing & Strategy @ TABS

Whether you’re an angel investor, VC, or incubator program, we’re sure you’ve heard about TABS by now. And if you haven’t — welcome! Below are some of the most common questions we are asked daily on our demos with Investors and Companies all over. Don’t see what you’re looking for? Book some time on our calendar to chat with our leadership team!

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“Does this service rival sites like Pitchbook, AngelList, and Net Capital? What is the main difference between TABS and those three? What makes TABS ‘special’ in comparison to them?”

TABS Score has revolutionized the venture diligence process. At TABS, we like to say that we have invented the FICO-equivalent score for the venture ecosystem. The deep tech (machine learning artificial-intelligence) platform allows for customized and in-depth due diligence at a fraction of the cost of typical diligence or investment services. Our algorithms track and analyze over 150 data points in order to best understand a company’s risk and future success. And presents it in one number, as a score that can be tailored to investors' priorities. Oh, and it does so in under a minute.

At TABS, we have built the first customized diligence assessments, with features ranging from product, strategy, legal, and people diligence. TABS also allows investors to choose which modules are the most important to them and weigh them respectively in the calculating of the score.

TABS also pinpoint specific weaknesses within companies and provide them with direct actions in order to mitigate risk. This can be done to raise their TABS score, which then serves as a metric of progress and accountability to investors. With many diligence processes, it can be difficult and tedious to track improvement, but with TABS, growth can be measured by simply requesting an update on a TABS assessment. This ensures that companies are on the correct path and investors are not in the dark.

We know no two companies are alike and therefore no two assessments should be alike as well. The TABS assessment gives investors the power to tailor the diligence process to prioritize specific metrics for different ventures. This results in a personalized TABS score for each company, based on an investors’ own preferences.

Furthermore, we provide quantitative risk measurements for qualitative inputs. With many early-stage ventures, diligence can be a difficult task, as many of these companies do not have substantial financial records to prove their profitability. Rather than solely operating on projections and a gut feeling, the TABS algorithm analyzes other indicators. These qualitative calculations include if this is the founders' first company or if they are serial entrepreneurs, legal risk, past experience, team dynamics, and even a personality assessment. TABS also compares the way companies perceive their own shortcomings against weaknesses identified by our algorithms, as an additional way to evaluate risk.

But TABS is for more than just early-stage (pre-seed to post-seed) ventures. With our Quantitative modules, TABS also conducts in-depth diligence for more mature companies — thus opening the floodgates for Private Equity firms and family offices globally. The TABS algorithm conducts high-level financial assessments, giving firms access to complex ratios (with a customizable aspect) in under a minute.

Beyond this, TABS has created a deal room. A platform for investors with hand-picked companies, directly matching their investment theses and other parameters. This can include specific industries, stages, and more importantly, a baseline TABS Score. We are pairing companies that have sought to conduct their own diligence with tailored investors, in order to spark both compatibility and profitability.

TABS has also been integrated on investment platforms, allowing funds, accelerators, or angels, to add a TAB button directly onto their site, as a first step in the funding process. This is not done with other diligence services.

And all of this is done with partnerships with third-party platforms in order to make TABS the starting point for both founders, with monetary savings on services such as Stripe, and investors, with communication and analytic apps such as QAE and Slack.

TABS does what consulting firms overcharge and take months to do while providing twenty times the data, giving value back to the founders, and facilitating personalized introductions between founders and investors. It would be naïve to say TABS doesn’t have any competitors, but AngelList and Net Capital both operate with different motives, primarily marketing themselves as capital-raising sites for investors and startups rather than diligence-based services. Additionally, AngelList has pivoted into a job search site for startups, as their angel investing angle has begun to lose some of the spotlights. And NetCapital, although they offer some diligence services, do not compare in-depth, personalization, or analytical ability. Additionally, these services offer little to no value for evaluating early-stage (preseed to Series A) startups with limited financial information.

If I were to compare TABS to any other platforms, I would pinpoint Pitchbook or Crunchbase Pro. Yet again, both of these services fall short when comparing the amount and value of analysis received and quite frankly, the price point.

“How does TABS work for early-stage ventures?”

TABS was built to provide quantitative analysis on qualitative metrics. We understand that there is not always extensive financial history with early-stage ventures, so at TABS our algorithms were built to analyze more than just financial data or projections. With 150 points of evaluation across 8 core company components, we can calculate a company’s strengths and weaknesses beyond the balance sheet, making the TABS assessment perfect for pressed-early stage ventures.

“Who uses TABS?”

TABS is a due diligence service for both investors and founders. At TABS, we have revolutionized the diligence process for investors, turning a weeks-long project into one done in under a minute. We provide comprehensive diligence for a fraction of the cost. We pride ourselves on giving value back to companies, through identifying critical weaknesses, tailored recommendations, and exclusive deals and credits with well-known startup service providers.

“I’ve been investing for a long time, why do I need this tool?”

TABS turns a weeks-long process into one done in under a minute. We run the analysis so you don’t have to, freeing up time and resources for you. We pinpoint weaknesses and identify basic pitfalls, to make sure you are aware of the risks associated with a potential company. We conduct product, people, market, legal, and strategy diligence, with flexible pricing plans for firms of all sizes.

“How much will subscribing to the TABS Suite set my firm back?”

Investors have the power to choose between different subscription packages, Angel Pro, Venture Plus, and Venture Pro (billed either quarterly or annually). Each of these packages offers a different amount of tokens per month, tokens are TABS internal currency. Each assessment costs a varying amount of tokens and can be “paid” for from the tokens purchased by the investor or can be billed directly to the company taking the assessment.

“How do I invite companies?”

Partners can invite companies by logging into the TABS suite and going to the “My Portfolio” section. Click the “Invite New Company” button. From there, you have the opportunity to choose either a Pre-defined Assessment or Customized Assessment. Once you choose the assessment you would like to send, you can fill out the company’s information and send the invitation. Investors have the option to pay for the assessment themselves or bill the company directly.

“I like to assign a weighting to different sections based on what type of Founder it is. Is this a feature within TABS?”

Yes, TABS allows you to weigh each investment and each aspect differently, This allows the score to be truly your own score for the firm.

After the company takes a Lite assessment (~15–20 minutes, on avg.), TABS builds out a digital dashboard where you get to see everything from how the company scored based on your metrics to visual representations of their cap table and unit economics, to actionable insights for the individual sections.

“Do startup founders that complete an assessment receive feedback from the investor?”

We’ve been in their shoes before. As a startup founder, the biggest pet peeve is that we never get any feedback. We spend a month or two in diligence and sometimes all you hear is “Sorry, it’s not a great fit for us.”

Well, why?

Two things about TABS that we really pride ourselves on, are you to give constructive feedback. It’s the first diligence process that truly gives actionable insights. On your end, you did the right thing and on their end, they get pages of feedback from us telling them how they can improve.

“What are the sources of data that TABS uses for its reports and comparative analytics?”

We aren’t one of those tools that scrape a company’s Instagram page and labels them as a “bad investment” because they only have 3 followers.

The TABS Score report is primarily comprised of user-inputted data, which is why we focus heavily on truthfulness traps. We can pick that up from patterns, using proprietary emotional intelligence / EQ algorithms. If a Founder is answering a question in a contradictory manner than they have previously answered, our system will reword the prior questions and will ask them again to the Founders later on. This functionality isn’t built to make anyone feel bad or look bad — it’s really about making sure the inputs are as truthful and accurate as possible. Once we have all of the data, the system takes the data through a series of models against our proprietary data sets to output an overall score, valuation estimate, and actionable insights.

“If I see a company I am interested in off of another website (ex. wefunder.com), and I want their TABS Score, how do I go about inviting them?”

You as the investor have the option to request a TABS report if they haven’t already done it. Just log in to your account on www.tabssuite.com and navigate to the Invitation Room.

OR — reach out and say “Hey, I’d love to run you through the TABS Suite!”

You are able to bill the assessment to that company or use the tokens from your subscription balance to run the company through the desired assessment.

If you are looking at a deal from the Deal Room that has already been invited by another TABS partner and want to see how they would score based on your customized scoring rubric, you can do so via the “Re-Score” option on the front of their Report.

“Can I only utilize a TABS assessment in the beginning stages of an investment?”

The TABS Suite is designed to be used at any stage of the process, whether you are evaluating companies that are automatically feeding into your portal via our webhooks, or whether you are triple-checking everything prior to funding a deal — there is no right or wrong way to use the platform.

At the end of the day, it’s like insurance. If you’re investing, let’s say, 250k in a company and their team, wouldn’t you want to spend 35 seconds (the average time it takes the TABS platform to score the company) to ensure your LPs can’t come back and chastise you for not pulling out all the stops?

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Have additional questions for our team, or want to learn more via a tailored demo? Book some time on our calendar to chat with our leadership team!

www.tabsscore.com

www.tabssuite.com