Periodic Reporting for period 1 - InnoTechRate (Innovation Technology Rating - system and digital hub)
Reporting period: 2022-10-01 to 2023-06-30
When discussing an innovation project, innovators and investors do not necessarily speak the same language, yet they both have the same goal: the commercial success of the project. Indeed, although an innovator typically prioritises scientific and technological characteristics as the foundation of its project, an investor focuses on systemic risks and commercial possibilities. This information asymmetry is even exacerbated when it comes to an innovation that holds both high commercial potential and a technological risk.
The InnoTechRate project intends to develop a digital tool that builds upon a data-based methodology and an AI-based engine for unparalleled innovation project rating. This platform allows project holders and investors to perform a technology rating of innovation projects in a simple and fast way. The technology rating system will be 100% data driven and powered by artificial intelligence allowing the objectiveness in the collection, the checking and the analysis of all data related to innovation projects.
The InnoTechRate project intends to develop a digital tool that builds upon a data-based methodology and an AI-based engine for unparalleled innovation project rating. This platform allows project holders and investors to perform a technology rating of innovation projects in a simple and fast way. The technology rating system will be 100% data driven and powered by artificial intelligence allowing the objectiveness in the collection, the checking and the analysis of all data related to innovation projects.
The Innotechrate project has implemented two main scientific activities: (1) stakeholder analysis and (2) design of a conceptual framework for an AI-based and data-driven digital platform.
(1) The stakeholder analysis aims to gain a deeper understanding of the needs and expectations of potential users of the technology rating tool. By understanding the investor selection process, the Innotechrate project can identify criteria and parameters involved in decision-making to support innovation projects. This analysis helps address information asymmetry and complements the conceptual framework of the forthcoming digital platform.
The analysis reveals that VC firms prioritize the management team's ability over the importance of technology when making investment decisions. This finding is supported by two recent academic studies, which highlight the belief of a substantial portion of European VC firms that a competent management team is the most critical factor for investment success. The challenges faced by private investors with limited funds and higher interest rates, along with decreasing public funding, emphasize the need for an informed approach to guide both public and private investors in selecting technology-based innovation projects. This situation, coupled with the rapid proliferation of artificial intelligence tools across various economic sectors, including in the VC area, presents an opportune moment for technology rating supported by a data-driven approach and AI.
(2) The design of the conceptual framework marks the beginning of building the digital platform for technology rating. The framework's main objective is to establish a solid foundation for processing diverse data from both internal and external sources of a project. This is a unique approach, since other valuation tools are based not on the project but on accounting and financial data, which is not very effective for disruptive start-ups. This function is facilitated by implementing an original innovation matrix presented in the conceptual framework. The matrix components are fueled by information and data related to the innovation project itself, primarily provided by the innovator and enriched by extracted external data sources.
(1) The stakeholder analysis aims to gain a deeper understanding of the needs and expectations of potential users of the technology rating tool. By understanding the investor selection process, the Innotechrate project can identify criteria and parameters involved in decision-making to support innovation projects. This analysis helps address information asymmetry and complements the conceptual framework of the forthcoming digital platform.
The analysis reveals that VC firms prioritize the management team's ability over the importance of technology when making investment decisions. This finding is supported by two recent academic studies, which highlight the belief of a substantial portion of European VC firms that a competent management team is the most critical factor for investment success. The challenges faced by private investors with limited funds and higher interest rates, along with decreasing public funding, emphasize the need for an informed approach to guide both public and private investors in selecting technology-based innovation projects. This situation, coupled with the rapid proliferation of artificial intelligence tools across various economic sectors, including in the VC area, presents an opportune moment for technology rating supported by a data-driven approach and AI.
(2) The design of the conceptual framework marks the beginning of building the digital platform for technology rating. The framework's main objective is to establish a solid foundation for processing diverse data from both internal and external sources of a project. This is a unique approach, since other valuation tools are based not on the project but on accounting and financial data, which is not very effective for disruptive start-ups. This function is facilitated by implementing an original innovation matrix presented in the conceptual framework. The matrix components are fueled by information and data related to the innovation project itself, primarily provided by the innovator and enriched by extracted external data sources.