Funding Potential Score Explained

What Is the Funding Potential Score?

The Funding Potential Score is a predictive tool that evaluates a startup’s likelihood of securing funding based on historical data from similar businesses. It offers a window into how attractive a company might be to potential investors, and it also helps founders demonstrate their track record—or future promise—in raising capital.

In a 24-month study spanning over 40,000 companies, startups in the top 10% of Funding Potential Scores were:

• 86% more likely to attract new funding compared to the lowest-scoring decile
• 48% more likely to raise additional capital than the remaining 90%

You can read more about this study here.

What Is the Average Funding Potential Score?

On average, companies score around 650. Seeing a company land near this midpoint could mean it has moderate funding potential or that there’s simply limited data available. When our model doesn’t have much to go on, it naturally assumes a score closer to this baseline.

What Is the Range of the Funding Potential Score?

Scores run from 350 to 900, capturing a broad spectrum of possible funding outcomes. This extensive range helps account for the variety of factors that can influence a startup’s ability to attract capital, from industry-specific dynamics to a founder’s track record.

How Is the Funding Potential Score Calculated?

We use a machine learning model that draws on historical data from thousands of businesses. It examines everything from industry trends and company size to previous funding rounds, using proven regression and categorization techniques to gauge the startup’s funding prospects relative to its peers.

How Should I Use the Funding Potential Score as an Investor?

Think of the Funding Potential Score as a guiding metric, not a final verdict. It can help you spot which companies might warrant a closer look but shouldn’t replace your own due diligence. Combine it with your insights into market conditions, personal risk tolerance, and overall investment strategy to make more well-rounded decisions in the fast-paced world of startup investing.

What other proprietary analytics does Hatcher+Score Provide?

Hatcher doesn’t stop at the Funding Potential Score. We also generate:

• The Other Components of the Hatcher Score (eight in total)
• Valuation Projection

These additional tools help both investors and startups get a clearer picture of each venture’s potential, making it easier to identify opportunities that align with specific goals and risk profiles.

In Summary

The Funding Potential Score is designed to give both investors and founders an edge when navigating the startup funding landscape. Whether you’re looking for the next venture to back—or hoping to highlight why your company deserves investment—this metric can serve as a valuable piece of the puzzle. If you’re interested in learning more, check out the other key components of the Hatcher Score for a deeper dive into our comprehensive analytics suite.