The KeyStone Score™ assesses how the capabilities allow the firm to capture value and whether your firm is equity investable or should pursue alternative sources of capital to grow and de-risk.
Scored Positioning Examples: DLRC
Dependency of the firm on partnerships to develop, scale, distribute product or service.
A high ratio of yes/no answers indicates that the firm needs a lot of complementary capabilities. A high percent dependence on complementary capabilities reflects a negative impact on the value capture potential, even though it is not clear yet whether the dependencies are generic or specialized.
Leveragability of the firm’s position of strength relative to its partners or other complementary capabilities.
A high percentage of leveragability tends to positively impact the value capture potential, because most complementary capabilities are generic. A low percentage reflects dependencies on specialized capabilities.
Replicability difficulty of replicating the firm’s core capabilities.
A high ratio indicates that the nexus of capabilities is difficult to replicate, and moves the firm in specialized current capabilities. A low ratio or percentage reflects that the capabilities – skills/networks/assets – are more easily replicable. It is difficult for the firm to establish a position of strength.
Connectivity of team, board in industry sector and/or segment.
High percentages indicate that the company is well positioned to understand the market drivers and processes in this industry and direct the company towards value capture.
Investment grade: DPSC (is dependent on the positioning score)
Scored Positioning Examples: DPSC
Diversification is a measure of the market size, market adjacencies and capability adjacencies – is the technology or service a platform from which diverse offerings can be made.
A high diversification percentage indicates that the growth market for the service or technology is substantial, and that investment size is strongly related to the scalability of the company.
Profitability focuses on costs, margins and sales cycles.
High percentages on this driver indicate that the cost of doing business – relative to investment required – may be sufficiently low to warrant potentially high valuations. Considers impact of value chain dependencies and revenue models.
Scalability represents the time horizon for investment to yield monetary return for investors, and market adoption of the product or service.
A high ratio indicates that customer acquisition and revenue growth are rapid relative to the investment required, and the company is positioned for potential equity investment given its exit value potential.
Capital Efficiency focuses on the cost of production of a unit product in your industry segment.
High infrastruction needs in the form of tangible assets influence the scalability and cost of your operation, and need to be commensurate with the value capture potential of your company and industry segment for the company to be investable.