About

Our Thesis

Through Market Validation Testing (MVT), we can dramatically increase the odds of success - ie, decrease the number of seed-funded startup failures - by proving out product-market fit before launch.

To ATO Ventures, a "valid market" means that there are actual paying customers in scalable, reachable numbers. Breaking this down:

1.  Paying customers - You have obtained pre-sales, credit card numbers, Letters of Intent (LOI), Purchase Orders (PO) or similar proof of purchase or promise to purchase.
2.  Scalable - Your identified target customer exists in large numbers (eg, University Graduates who majored in Economics or Business between 1985 and 2015 vs. Graduates who majored in Underwater Basket Weaving in 1965)
3.  Reachable - It is easy to find and contact these target customers at a cost that supports profitability.

Market Validation Testing (MVT), then, is the process of conducting experiments, or tests, to ensure that there are enough paying customers who are willing to pay a profitable price in markets that are both scalable and reachable.

The concept of Market Validation Testing (MVT) was developed by our founder, Jennifer P. Hopp, and it is the same methodology around which she built Valid Startup, an online program that walks founders through the process of starting a business, step-by-step. This program is also the basis for the ATO Ventures' incubator program and will soon be the core curriculum for several university entrepreneurship courses. The ninth Module takes founders through the process of MVT, and it is at this point that they become a candidate for ATO Ventures funding. 

Whether a startup completes the Valid Startup program or comes to us another way, our process is the same. We have a two-investment approach to backing pre-launch startups. We first make a small, pre-seed investment that is earmarked for MVT. If the startup passes the test, we then make a larger, seed investment that the founders typically use for completing the Minimally Viable Product (MVP) and going to market.

As part of the process, we identify an outside team to design and execute the tests as well as track the data and draft the final reports. This MVT team works extremely closely with the startup founders and the ATO Ventures team, including Jennifer, throughout the MVT process. 

Why MVT? The number one reason seed-funded startups fail is post-launch discovery that there is not sufficient product-market fit. In other words, there are not enough people willing to pay a profitable price for the product. ATO Ventures’ mission is to make sure that doesn't happen to any of its portfolio companies. We are so adamant about the need for startups to conduct MVT before launching that they developed the two-investment approach described above to ensure startups have the capital and resources necessary to complete the process effectively and in an unbiased manner. 

At the end of a successful MVT project, startups working with ATO Ventures have their first revenue, a proven Go-to-Market Strategy and an additional seed investment for product completion and launch. You can submit your startup for funding consideration here.