No Black Magic: Can a B.C. prof take the guesswork out of venture cap deals?
Financial Post Business Magazine, September 2006

Venture capitalists take pride in their gut business instincts, at least when they back winners. But their overall record isn't great: 80% of their investments either fail or generate lousy returns. But what if they could turn that stat on its head, and pick investments with nearly 80% certainty of success? Well, maybe they can, says Brent Mainprize, a professor at Victoria's Royal Roads University.

After years of research into VC investments, Mainprize, working with his Australian colleague Kevin Hindle, has developed Venture Intelligence Quotient (VIQ), a Web-based program that he says predicts business success eight out of 10 times. Using a questionnaire, VIQ users rate business plan elements on a scale of one to nine - originality, the entrepreneurial team's connections, the ease of attracting clients and so on. At the end, the computer spits out a response - the plan is either doomed, marginal, or a potential winner.

VIQ is not yet widely available for sale, but Mainprize does have clients: The Danish government uses it to help entrepreneurs, a few Australian firms use it to test in-house projects, and Mainprize is working with First Nations to adapt it to evaluate cultural factors in business plans. But he has yet to make headway with one audience: venture capitalists. "They aren't eager to hear there's no black magic in what they do," he says.