Funding Readiness Framework (ARQ C1) Week 4 Update

This is the fourth update (Week #4) as part of our quest to design and build a funding readiness framework. See initial proposal, week #1, week #2, and week #3 updates here.

What we planned to do

  • Polish first draft of criteria and write statements for project/evaluator

  • Create list of projects for testing

  • Run the first test

What we did

  • Agreed on and polished the first draft of the criteria

    • Team

      • Composition

        • Who is on the core team and what are their roles?
      • Track record & reputation (why this team, why this project?)

    • Finance

      • Revenue sustainability model (how will you make and sustain revenue)

      • Runway

      • Planning

      • Transparency

    • Users

      • Who are your target users?

      • Addressable market (how many potential users are there and where are they?)

      • Traction & churn & stickiness (how many users do you have and how are you keeping them?)

    • Risk Assessment

      • What risks have you identified and how will you mitigate them?
    • Problem Identification

      • What is the specific problem that you’re solving?

        • Evaluator: This project has articulated an actual problem, not a projected one.
      • What is your solution to the problem?

        • Evaluator: This project has a viable solution to the stated problem.
    • Impact

      • Measurements (What metrics do you use to measure direct impact?)

      • Evidence of past direct quantitative impact (what impact has been made as per the identified metrics?)

      • What are the indirect impacts of your project’s work?

      • Proof that funding will enable future impact growth (How will funding enable you to increase those metrics?)

    • Product/Service

      • Value proposition (What is the core value you offer your users?)

      • Viable onboarding means (What are the steps required to onboard users/customers to your solution?)

      • What steps have you taken to prepare, technically and operationally, for the next wave of users?

      • Meeting milestones

    • Marketing

      • Narrative

        • What is/are your core narrative(s)?
      • Plan to attract and scale new potential users

        • How do you plan to attract and retain new potential users?
  • Wrote statements for projects and evaluators according to the criteria

    • Problem Identification

      • Project: Please describe and provide evidence for the specific problem(s) that your project solves.

      • Evaluator: The project articulates an actual problem, not a projected one.

      • Project: Please describe your project’s solution to the problem(s) you identified.

      • Evaluator: The project provides a viable solution to the problem(s) it identifies.

    • Product/Service

      • Project: Please describe your solution’s core value proposition.

      • Evaluator: The project provides clear value to its users.

      • Project: Please describe the steps required to onboard users/customers to your solution?

      • Evaluator: The project prioritizes usability in its solution.

      • Project: Please describe the steps you have taken to prepare, technically and operationally, for the next wave of users.

      • Evaluator: The project is prepared to handle the next wave of users.

    • Users

      • Project: Please describe and quantify your target user(s) and target market(s).

      • Evaluator: The project understands its target users and markets.

      • Project: Please describe and quantify the traction your project has established.

      • Evaluator: The project has proved that it can attract and retain users.

    • Impact

      • Project: Please describe how you measure and verify your project’s direct impact.

      • Evaluator: The project has identified meaningful ways to measure and verify its impact.

      • Project: Please quantify the impact your project has made to date using the metrics you identified.

      • Evaluator: The project has already established a track record of making impact.

      • Project: Please describe the indirect impacts, both negative and positive, of your project’s work.

      • Evaluator: The project has sufficiently considered the indirect impacts of its work.

      • Project: Please describe how an increase in funding will enable you to increase your project’s direct impact.

      • Evaluator: The project has a clear plan to increase its impact with additional funding.

    • Team

      • Project: Please list your key team members, their role(s), and, if possible, a link to at least one social profile.

      • Evaluator: The project team has the people and roles necessary to deliver.

      • Project: Please describe why your team is the right one for this project at this time.

      • Evaluator: The project’s team has the track record and reputation to be successful.

      • Project: Please describe your project’s governance structure and decision-making process.

      • Evaluator: The project has a clear, functional governance structure and decision-making process.

    • Finance

      • Project: Please describe how your project generates revenue.

      • Evaluator: The project has a viable revenue model.

      • Project: Please describe how your project achieves or plans to achieve financial sustainability.

      • Evaluator: The project has a viable path to financial sustainability.

      • Project: Please describe your project’s fundraising efforts, revenue generation, and current runway.

      • Evaluator: The project has proved itself capable of raising funds and managing its budget.

      • Project: Please describe your project’s efforts at financial transparency.

      • Evaluator: The project is committed to being transparent with its finances.

    • Risk Assessment

      • Project: Please describe the key risks associated with your project and your mitigation strategies.

      • Evaluator: The project accurately identifies the key risks and provides viable mitigation strategies.

    • Marketing

      • Project: Please describe your project’s core narrative(s).

      • Evaluator: The project has an engaging story to tell that resonates with its stakeholders.

      • Project: Please describe your plan to attract and retain new users.

      • Evaluator: The project has a viable strategy in place to increase its number of users.

  • Created a list of projects for initial testing

    • M3tering

    • ChangeCode

    • Somos Axolotl

    • CHATAFISHA

    • RiFai Sicilia

    • ReFi Medellin

  • Discussed the scoring mechanism at length, with 5 options considered, and arrived at a conclusion (in order, points for Agree, Neutral, Disagree)

    • 1 0 0

    • 1 0 -1

    • 2 0 -1

    • 5 3 1

    • 3 1 0 (Selected)

  • Agreed to display results as a percentage as opposed to a score

    • For example, a project is 78% funding ready
  • Conducted first test based on our own understanding of the test projects

What we learned

  • The different scoring mechanisms we tested often produced wildly different results, especially in comparing the projects with each other

  • There really is no end to the number of criteria that can be considered when evaluating a project

Challenges encountered

  • It was difficult to accurately test without “inside” information from the projects

  • It took a while to figure out whether a Neutral score should be considered positive or have no impact on the score.

Next steps

  • Review criteria and statements for necessary changes

  • Run a second round of testing with help from the projects themselves and other external resources like Karma GAP.