For investors
03 Aug 2022

Vetting the Best: Our Selection Process for Consumer Goods Brands

Introducing our monthly selection process for fast-growing consumer goods brands, where we carefully vet and choose the best.

Vetting the Best: Our Selection Process for Consumer Goods Brands

Our platform rigorously selects brands for investment rounds by following a detailed selection process. We focus on fast-growing consumer goods brands based in the UK or continental Europe, which must meet certain criteria. To qualify, companies must exhibit strong consumer interest in their products, have a competent founding team, and be in a stable financial position. The funds raised through our platform are used by brands for working capital such as inventory and packaging materials.

Here are the 6 stages of our selection process:

1. Market Search

We start the selection process by searching for relevant and trustworthy platforms where we can find potential consumer goods brands. We comb through hundreds of founder communities and business databases to identify the most promising companies.

2. Brand Scoring

Once we've found a company, we evaluate its quality based on the following criteria:

- Type of business: We are particularly interested in finding food and beverage brands, which form a significant part of the consumer goods brands in the UK.

- Business karma: We prioritize brands that not only aim to make a profit but also have a positive impact on the environment and society. We select businesses with high social responsibility that aim to be not only profitable but also ethical, environmentally friendly, and socially useful.

- Sales channels: We seek brands that have already established trust in the market. We look for brands that sell through stores such as Planet Organic, The Food Market, Selfridges, Eat17, and Whole Foods, among others.

- Marketing: A company's ability to sell its products is crucial to its success. We assess the company's marketing strategy, including its storytelling, website design, social media presence, and packaging.

- PR: We prefer brands that are actively involved in the media, participate in the product of the year nominations, and attend exhibitions and fairs. These activities increase the brand's visibility and recognition and positively impact our assessment.

- Customer reviews: Feedback from the customers of the brands is an important factor in our scoring. We consider feedback from platforms like TrustPilot, social media, and other sources to gain first-hand insights into the strengths and weaknesses of the product.

3. Founder Scoring

We also consider a narrow subset of founders, taking into account:

- Higher education: Founders who have graduated from a higher education institution, such as a university or business school, receive higher scores.

- Work experience: Our team pays close attention to a founder's professional experience, particularly in corporations. Founders with experience in corporate cultures are better equipped to build their own businesses.

- Position held by the founder: The background of the founder is also significant. Founders who have held managerial positions and have built successful careers in a corporation have a higher chance of success in their own businesses and receive higher scores.

- Immersion in the company: We carefully evaluate a founder's commitment to the company. We ensure that the founder is fully dedicated to the company and not involved in any other projects.

- Strong, professionally relevant social connections: A strong network of like-minded individuals and strong networking skills are important for every entrepreneur. We assess a founder's interactions with others, the number of LinkedIn contacts, and the frequency of discussions about the project.

4. Brand Validation

At Scramble, we prioritize the thorough evaluation of each brand to ensure their reliability and solvency:

- We perform comprehensive due diligence reviews that examine all aspects of the borrower's company, including its history, management team, operational infrastructure, funding goals, and financial standing.

- Based on financial reports, we analyze the borrower's financial performance, comparing it with industry standards and past results to determine if it operates above or below average.

- We also conduct interviews with successful candidates to confirm their capability in running the business and fulfilling obligations to investors and Scramble. We verify the identity and competencies of the management team and shareholders to guarantee they are who they claim to be.

5. Loan Approval

Once a company has passed our verification process, they must determine the maximum loan amount they want to receive through our platform. The higher the requested loan amount, the more stringent the verification requirements and the more documentation that will be requested.

For new members, receiving a large loan right away is not possible. We initially provide a minimum loan amount, but if their repayment history is strong, we may consider increasing the amount in the future.

6. Founder Verification

We take a diligent approach to verifying the identity of our borrowers to ensure the absence of fraud and anti-money laundering. This includes a review of the ownership structure, such as beneficial owners, shareholders, and authorized representatives, through an examination of the company's legal documents and compliance with EU AML regulations. This process also involves assessing the borrower's association with politically exposed persons, screening against any applicable sanctions lists, and validating the legitimacy of the source of funds.

Through this meticulous verification process, we bring you a carefully selected pool of high-growth brands that provide a diverse range of investment opportunities.