The path

From problem to profit, in thirteen phases.

The complete journey of a Volcano startup, in thirteen decisions, not in one. And with a different starting point: the path does not begin at the idea, it begins at the problem, captured and analysed before the startup exists. A phase exists only if it closes a question whose answer changes a decision: continue, pivot, stop, invest.

11 min de lectura

To read this page: what the TRL is · what the CRL is · how much each phase costs and is worth · the path diagram, with the figures in a table.

Macro-phase 1 · Discovery (F1–F2)

The first two phases are walked by Volcano: the startup does not yet exist, and that prior work is the reason it is later born with value.

At the foot of each card: who guides the phase, the TRL band it corresponds to and the typical funding of that stretch.

The phases F1 and F2 form the discovery: the front end of innovation, where the problem is captured and analysed before formal R&D. The Frascati Manual leaves it outside R&D, which is why it is funded differently; successful projects invest here around twice as much.

F1 · Capture of the problem

Has a problem entered the network, brought by whoever suffers it?

Problem formulated by its bearer, and entry channel identified: whoever suffers it tells the network, through a client, the consultancy or an ally.

You do: listen to the problem from the voice of the one who suffers it and record how it came in. You deliver: the problem sheet: who suffers it, how it reached the network. You exit: with the problem formulated by its bearer.

Guide: Volcano · TRL: none yet · Typical funding: Volcano and partners; visionary angels.

F2 · Analysis of the problem

What is the process where the problem lives like, and is it worth solving?

The current process, broken down into its steps. If a solution already exists, it is checked piece by piece that it is ineffective or inefficient. The exact point of pain. Frequency, cost and willingness to pay. Reliability of the source.

You do: measure the pain and whom it hurts, with interviews and data from the environment. You deliver: the problem analysis, with its size and its affected. You exit: with the evidence that the pain is real and widespread.

Guide: Volcano · TRL: none yet · Typical funding: Volcano and partners; visionary angels.

Macro-phase 2 · R&D (F3–F7)

Five phases dominated by the technical axis: the TRL scale runs beneath them, and each one closes with a decision.

F3 · Ideation

Are there plausible routes, and which one deserves the concept?

Alternatives compared; reasoned choice.

You do: generate and filter solution paths on the analysed problem. You deliver: the fan of paths with their first technical and commercial filter. You exit: when at least one plausible path survives the filter.

Led by: Volcano with the nascent startup · TRL 1–2 · Typical funding: Tax Lease; grants; FFF; angels.

F4 · Concept

Has the idea stopped being a hypothesis?

An idea is a hypothesis; the concept is the idea turned into a verified mechanism, even if only theoretically. Theoretical verification is full science: physics has thought experiments, and with them Einstein changed our view of the world. Evidence: the mechanism described, the physical and economic limits checked on paper, the risks named. With the concept formulated (TRL 2) the memoria técnica is drafted, and with it the business plan: the dossier with which the project presents itself to funding.

You do: define the chosen solution and the business model draft. You deliver: business model and memoria técnica: the paper that precedes the laboratory. You exit: with concept and model defensible before the network.

Led by: the startup with Volcano · TRL 2 · Typical funding: Tax Lease; grants; angels.

F5 · Proof of concept

Does the central mechanism work?

The technological feasibility of the concept demonstrated with real instruments, mechanical, hardware and software, under controlled conditions and reproducibly.

You do: the experiment that demonstrates the critical function, and the first cheap customer tests. You deliver: the documented proof of concept, with what was learned from smoke and concierge. You exit: when the critical function is demonstrated.

Led by: the startup · TRL 3–4 · Typical funding: Tax Lease; grants; angels.

F6 · Prototype

Does the integrated system work in a relevant environment?

Prototype operating outside the laboratory.

You do: integrate and validate in the laboratory and in a relevant environment, crossing the deep part of the valley. You deliver: the prototype that works off the paper. You exit: with the prototype demonstrated in near-real conditions.

Led by: the startup · TRL 5–6 · Typical funding: Tax Lease; angels; convertible note; pre-seed.

F7 · MVP

Does the minimum viable product hold up in front of real users?

Real use, structured feedback, observed abandonment.

You do: take the minimum product into real hands, with the patent filed and the minimum brand already on the street. You deliver: the MVP in use, with the visual identity and the web complete. You exit: when real users use it and come back.

Led by: the startup · TRL 7–8 · Typical funding: Tax Lease; convertible note; seed.

Macro-phase 3 · Market (F8–F11)

Four phases dominated by the commercial axis: once the technology works, the risk that remains is market risk, and it is measured in its own right.

F8 · Traction

Does somebody pay, repeat, and across several customers with a recognisable channel?

Initial recurring revenue on the minimum sellable version; channel identified; acquisition cost measured.

You do: sell: someone pays, repeats and recommends; the cash flow crosses its break-even here. You deliver: traction metrics and sales materials. You exit: with revenue that grows and repeats.

Led by: the startup · CRL rising · Typical funding: Seed / Series A; revenue-based.

F9 · Product-market fit

Do retention and unit economics work at small scale?

Cohorts that stay; positive unit margin; observable organic growth.

You do: adjust product and channel until the market pulls. You deliver: the evidence of product-market fit. You exit: when demand repeats without pushing.

Led by: the startup · CRL rising · Typical funding: Series A.

F10 · Profitable growth

As it grows, does the unit margin hold?

Growth does not buy revenue at a loss: the unit metrics hold as the customers multiply, and the product is by now the minimum marketable product (MMP), ready for the broad market.

You do: scale sales with healthy unit economics. You deliver: the growth book: cohorts, margins, channels that perform. You exit: with growth that pays for itself.

Led by: the startup · CRL rising · Typical funding: Series A/B; venture debt.

F11 · Profitability

Do the solution's flows cover the structure?

Operating break-even reached: the profit on the solution.

You do: consolidate operating profit and cash discipline. You deliver: accounts in the black in a sustained way. You exit: when profit is structural, not one good quarter.

Led by: the startup · CRL high · Typical funding: Bank debt; growth.

Macro-phase 4 · Scale (F12–F13)

The multiplication of the model, all the way to liquidity.

F12 · Scale

Does the model hold up under multiplication: operations, channels, geographies?

Expansion without breaking margins or organisation. Internationalisation is a case of this phase, not a separate phase.

You do: multiply markets and capacity with scale capital. You deliver: the organisation that withstands the size. You exit: with the position defended in more than one market.

Led by: the startup · CRL high · Typical funding: Growth equity; project finance.

F13 · Liquidity

Can whoever invested get out?

Sale, secondary or flotation, which is only the rarest case. The profit belongs to the company; the liquidity, to the investor: they can be years apart.

You do: prepare and execute the exit. You deliver: the sale book and the closed deal. You exit: when the value built converts into liquidity for partners and investors.

Guide: the startup and its partners · TRL: completed · Typical funding: M&A; secondary; markets.

The F8/F9 frontier deserves a warning. The sector's empirical research (Startup Genome Report) places here the most common cause of death: premature scaling, spending on growth before retention and unit economics can sustain it. The order of the phases is not a formality: it is the vaccine.

The two markers, off the scale.

Protected IP. The protection of intellectual property is not a phase: it is an event that can arrive at any of them, as a rule from the proof of concept onwards. Saying that a startup has its IP protected says what it has, not when by obligation.

Funding. There are no phases without capital: there is, for each phase, the funder whose trade is that level of risk. Capital can come in at any phase, from the visionary angel who accompanies the capture of the problem to the industrial buyer at liquidity; what changes is who it is, with what instrument it comes in and at what price it buys the risk. On this path, the Tax Lease's tax investment typically funds phases F3 to F7: the riskiest window, covered before private capital has to come in alone.

The seven decisions.

Passing a phase is a decision. From F1 to F7, each phase closes with a question, and that question is the filter that decides whether the project deserves the next one: seven questions, seven gates. Each yes hands over the next phase with the previous risk already paid, and the project reaches the market having shown, step by step, that it deserves the capital it receives. Who guides each phase is written on its card; the seven questions in a row are in the model.

The path: thirteen phases, four macro-phases, seven decisions

A single scale: thirteen phases, seven decisions in the R&D, two thermometers. The funding runs beneath all of them.

Why it is born carrying value.

Most startups are born from zero: with no prior validation of the problem, no protection of the intellectual property, no access to a network already formed. A Volcano startup is born differently, because from day one it inherits the work done in F1 and F2 and the access to the network of capabilities and relationships Volcano already has. That is why the starting valuation is not zero: it is of the order of €300,000 to €500,000, and it grows from there according to the capital contributed by each project's tax and private investors.

The general statistics of the sector are harsh: most startups do not reach the last phases, and no tool changes that entirely. What does change is the starting point in each phase. A Volcano startup reaches each phase validated, protected and with a network from the start, and that raises its probability of success at every step. Not because the risk disappears, but because much of it has already been reduced before starting. The specific valuation and probability values per phase are part of the documentation shared after qualification.

Notice. The content of this page is informational and does not constitute tax, legal or investment advice. The figures are indicative and the values applicable to each case are reviewed after qualification.

Frequently asked questions

Why thirteen phases, and not the usual four or five?

Because each phase marks a different decision (which problem to attack, what to build, for whom, how fast to grow) and grouping them hides exactly the information that matters for knowing where a project stands. The first two form the discovery: the front end of innovation, where the problem is identified and analysed before formal R&D.

At which phase does an external investor's capital come in?

At any of them: what changes is the funder's profile. The Tax Lease typically comes in between F3 and F7; angels can accompany from the capture of the problem itself; investment groups and banks usually prefer the product already validated, from product-market fit onwards.

Do all Volcano startups reach phase thirteen?

No, and it is to be expected that they do not: the probability of success falls at every phase, as in any real innovation process. What changes is the starting point, higher than the sector average at each of them.

Where are the exact values of each phase shared?

The valuation amounts and the specific probabilities form part of the documentation shared after qualification; here the criterion and the order of magnitude are explained.

References: the TRL scale (NASA); stage-gate processes with go or kill decisions (R. G. Cooper); the CRL/CRI commercial maturity indices (ARENA, 2013); the Investment Readiness Level (S. Blank); the Startup Genome Report (Marmer et al.); the front end of innovation or discovery phase (P. Koen et al., 2002); the definition of R&D in the Frascati Manual (OECD).

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