Your success is our goal.
Your success is our goal.
99FT’s RA is a tool to help evaluate fintech companies’ readiness to achieve major objectives, such as a capital raise, launch, market-entry, break-even, or next-level growth. 99FT’s RA identifies potential inhibitors of success as well as opportunities for developing or honing capabilities that may accelerate or enable broader success. 99FT uses RA results to prioritize critical gaps and opportunities (vs. those that can be deferred) and focus workplans to enable efficient use of resources to reach targeted milestones. The 99FT RA provides investors, including 99FT, insights and confidence to put “skin in the game” with our client partners.
99FT’s RA encompasses over 200 points of readiness across 11 different functions and generally takes only a couple of weeks to complete. This is accomplished through a series of questions specifically chosen from our RA catalogue as the most relevant for a given company type (e.g., fintech lender), industry (e.g., healthcare loans), geography and regulatory regimes (e.g., US thus CFPB, OCC, etc.) and stages of the business (e.g., early stage).
The RA tool guides the 99FT facilitator and client through the selected questions, posing subsequent follow-up questions to quickly arrive at the required level of detail to form a confident opinion on the company’s readiness. By selecting which of three levels of assessment is most appropriate, the RA filters the questions to arrive at a scope appropriate for the time and budget allocated for the RA.
The three levels of assessment include:
A narrower and lower-depth RA with lower levels of required confidence can take as little as two weeks. More comprehensive RAs that require higher levels of confidence typically take a little longer, and timing also depends upon client responsiveness and availability. On average, we suggest to plan for at least 2 to 4 weeks if looking for 99FT or our investment partners like PEs to consider the results when deciding if and how much to invest.
For each of the three levels of assessment, questions are posed, and their responses lead to more detailed questions. The rapid assessment generally stops at 2, and the comprehensive typically stops at 4 or 5. In addition, the breadth is typically constrained as well based on the level of analysis.
The questions are based on over 30 years of experience helping fintechs and their investors achieve real, measurable results and success.
In addition to the quality of the answers themselves, the ability to answer each question with proof points also increases the score, as the confidence level and veracity of the response is factored into the score. Verbal answers score lower than those accompanied by documentation, which are scored lower than those accompanied by first-hand observation by the 99FT team.
99FT’s willingness to invest time and/or financial capital, as well as our willingness to introduce our venture capital and private equity partners to a Fintech are directly tied to the Readiness Assessment score. Especially for capital raise objectives, we are not just scoring the Fintech’s readiness for principal milestone(s), we are also assessing its readiness to attract investors and be credibly presented to our partners with whom we have long standing, trusted relationships.
A known, recognized and well-articulated gap with a plan to close the gap demonstrates a level of readiness in and of itself. A lack of awareness, or willingness to disclose or detail gaps, and absence of well thought-out plans to close those gaps can be a major barrier to success and to attracting investment from 99FT and our partners. Trust and visibility will help the Fintech; 99FT and prospective investors will lean in to help the Fintech prioritize and sequence the gap remediation efforts (driven by nature/type of the fintech’s business, its overall maturity, etc.), execute on these efforts, and ultimately succeed. We are here to help and partner with the Fintech. But we can only do so if there is an effort and desire to acknowledge gaps so we can prioritize and apply that help.
Some clients prefer to have only a subset of factors assessed. While this is possible, it is important to understand that reducing the scope will reduce 99FT’s visibility into the broader organizational, project or product’s risk and readiness. Therefore, it should be understood that a narrower scope will result in a lower level of investment (for situations where client is seeking 99FT’s assistance in preparing for a capital raise with one or more of our investor partners). In some cases, the 99FT investment could drop from 75% to 25%, or even be removed completely when the RA scope is too narrow. At times we will offer to conduct a very narrow initial Assessment at a very low cost as an investment in our relationship with the Fintech or sponsoring company (e.g. a private equity firm).
It is also not uncommon for 99FT to offer the Fintech client or sponsor a broader assessment at a 25 to 50% discount. On these cases we ask that the company or sponsor return that investment if they choose to proceed with the assessment results without 99FT’s further involvement. This is because our goal is to be partners and/or investors, actively helping achieve the Fintech’s results, not just performing assessments.
Each question from our RA tool is tagged to be ‘in scope’ or ‘out of scope’ based on the specific client situation (e.g., credit strategy questions will typically be applicable only to lending products). We probe and score each in-scope question’s response (including provided documentation) based on a 5-point scale to assess readiness for the company or product to achieve the principal objective(s), such as a successful launch, capital raise, revenue milestone or break-even. Each question is also weighted based upon a default setting for companies of that type and in that stage - e.g. the question “How much has each founder invested” takes on a higher weight for early stage companies, while it has a much lower weight for mature established companies. These settings are often tuned for a given Fintech before beginning the RA.
The initial Assessment provides a baseline for subsequent assessments and comparisons to track and monitor progress. It is common for 99FT and its investment partners to commit contingent investment based upon achieving agreed to scores and improvements over time.
Results are confidential. Only designated member of the Fintech client team and 99FT have access to the results. With the written disclosure approval from both the Fintech client and 99FT, the results can be shared with third parties, such as private equity and venture capital investors.
The 99FT RA is an important investment. Those who see the RA as an expense rather than and investment are typically less of a fit for 99FT and its investment partners like Private Equity firms. The RA is a valuable investment for any serious fintech or other stakeholder company that wants to improve chances of product launch or market entry success, attract investment, and affordably gain access to and learn from some of the most experienced fintech subject matter executives in the United States such as former regulators and fintech CEOs, CFOs, COOs, CIOs and CROs.
Readiness Y axis, Confidence X axis. Top right = very ready, and with the highest level of confidence.
Once your company has been scored, a 99FT advisory partner will schedule a meeting to review the preliminary score and help you interpret the results. It is not uncommon for clarifications and adjustments to be made during, or as a result of, the preliminary findings meeting. In addition, it is common to only distribute specific sections (with or without sensitive redactions) of the RA findings to specific internal departments, functions, stakeholders and investors. If your company, the parent or major business partners are publicly traded, the release can also create significant risks such as SEC insider trading and other violations.
It is important not to begin sharing the preliminary (as well as final) results internally or externally until you have had the meeting with your 99FT partner and have agreed to the finalized findings and expressly agree what (if anything) to disclose. Remember, the RA and findings are confidential, representing intellectual property, and are covered by the Nondisclosure Agreement your company signed with 99FT. This is both to protect your company as well as companies and people outside of your organization. It is important that third parties given access to the results are bound by a Confidentiality Agreement as well as a Non-reliance Agreement as the Assessment is not priced to provide third party assurances and attestation.
Our private equity partners are an active participant in the readiness assessment of fintechs seeking investment by providing input on the questions that are most important to the PE and weighting them accordingly. We start with a 99FT default weighting based upon our own experience as it relates to a given objective (e.g., capital raise), however, each private equity partner could fine tune it to see how it changes the relative positioning and attractiveness of our Fintech clients. This makes them active vs. passive in the process. And more engaged with 99FT.
*99FT is not an investment advisor or broker. We offer assessments to clients who then choose what they feel comfortable releasing to third parties. Non-reliance and non-disclosure is required by 99FT for the use of RA results and other deliverables and findings.
**Guarantees are defined as fees at-risk for achieving agreed to goals as explicitly written in 99FT Client Engagement letters.