THE NEXT BIG

THING IN HIRING

Featured in:

… and many more

Case presentation | WPI Venture Forum | May 8, 2012

2

The Hiring Dilemma

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Hiring Costs for a 60k a Year Employee

A lot is riding on it – who do you hire?

$74,000 Total Cost of Hiring = 80k

$24,000

$16,000

$6,000

$200,000

$40,000

$25,000

$16,000

Salary & Increase &

Bonus

Retention Costs of a 60k

a Year Employee per Year

Cost of a Bad Hire - a 60k

a Year Employee After 1yr

Office Space

Benefits

Training & Taxes

All of the above

Lost productivity &

Institutional Knowledge

Lost Innovation & Morale

Customer & Reputation

Impact

$12,000 Legal & Severance

Cost of Hiring the Wrong Person = $293k

| Introduction

3

The Industry Solving the Hiring Dilemma

The US personnel staffing

industry includes about

32,000 companies with

combined annual revenue

of about $215 billion. The

industry is highly

fragmented: the 50 largest

companies generate about

40 percent of industry

revenue.

Summary

$215,000,000,000

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1.5

2 2.5

3

3.5

4

4.5

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Bil.

Staffing in 2011

4% 5% 7%15% 17%

28%

58% 62%

0%

20%

40%

60%

80%

Le

ga

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Sa

les &

Ma

rketin

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Execu

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He

alth

Ca

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IT/T

echn

ical

Acco

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g &

Fin

an

ce

Ind

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ial

Offic

e-

Cle

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Staffing by Job Role in 2011

Number of Staffing Organizations by State Staffing by Segments

< 1,000

1000 – 2,000

More than 2,000

50%

40%

10%

Temporary Help

Pofessional Employer Organizations

Placement Agencies

| Introduction

4

Cangrade The most predictive pre-employment evaluation commercially available

Time 15 min.

Time to set-up job 10 min.

Time to share job 5 min.

Time to apply to job 15 min.

Cangrade can gather much more

information about a candidate in 15

minutes, than others can in hours.

Benefit HUGE

Psychometric Tests 20+

Skill Tests 300+

Hiring Features 200+

A full-featured Platform ready to

manage, automate and enrich any

hiring project.

Cost per Candidate $1

Free Trial Length 9 Months

Price after Trial $1

Other Features Free - $5

By far the most affordable pre-

employment evaluation available.

Highlights

Through a 15-minute test, the

Cangrade evaluation enriches

a job candidate’s application

with complex information

about , personality, job fit and

skills combined into one

simple Candidate Grade,

which has proven extremely

predictive of real workplace

performance. Other Evaluations Cangrade

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Cangrade

Evaluation

Skills

Testing

Aptitude

Testing

Interview Reference

Checks

Job

Experience

Emotional

Intelligence

Phone

Screening

College

GPA

How much of the variation in job-performance do different pre-

employment evaluations predict?

| Introduction

5

Early History of Psychometric Pre-Employment Testing

• Tested 17,000 individuals on behavior, acuity, reaction time…

• Demonstrated that tests can provide meaningful scores

• Greatly refined Galton’s tests

• Focused on motor and acuity tests

• Founded ‘Psychological Review’(1897)

• Introduced the first modern intelligence test, which directly

• tested higher psychological processes

• Set the foundation for IQ testing: mental “age’” divided by

chronological “age”

• (1919) The US government tested 1.75 million Army recruits

• (1942) Adopted aptitude testing for determining enlistment

eligibility and job placement

Francis Galton (Charles

Darwin’s cousin)

James Cattell (first used

the term ‘mental test’ in 1890)

Alfred Binet (first

modern intelligence test)

US Military (widely adopted

psychometric testing)

1884

1890

1905

1942

• 68% of employers engage in various forms of job skill testing.

• 29% of employers use one or more forms of psychological measurement or assessment.

• 20% of employers measure cognitive ability

• 14% of employers use some form of managerial assessments

Private Sector Adoption

| Solution

6

Science Overview

Subjects from meta-analyses

200,000+ Extensive statistical

modeling based on findings

from over 200,000 meta-

analytic subjects

Our own experimental subjects

4,000+ Over 4,000 of our own

subjects were used in

Identifying aspects of

personality, aptitude and

motivation that impact real

workplace performance.

Experiments we conducted

30+ To further validate our

findings the Cangrade team

has personally conducted

over 30 empirical

experiments.

Traits measured

30+ The Cangrade evaluation

measures over 30 different

personality traits and how

they interact for particular

jobs

Time to complete the evaluation

<15 min Our innovative multivariate

approach allows us to

gather an industry leading

amount of data trough an

amazingly fast 15 minute

test.

Predicting variation in performance

43%+ The Cangrade evaluation is

able to predict over 43% of

the variation in a person’s

real world job performance.

| Solution

Powered by Cangrade’s Team of Researchers at Harvard University

7

Job-Fit

| Solution

8

Technology

The technology behind Cangrade is a mobile-friendly flexible web application platform that allows for a

modern architecture while bringing a highly interactive user experience. Our proprietary and modern

development environment allows Cangrade to introduce on demand cutting-edge features.

8.5

8.3

9.7 Platform Quality

Platform Features

0 2 4 6 8 10

Platform Speed

8.8

1

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3

4 5

6

7

8

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10

Overall Rating

0 2 4 6 8 10

0 2 4 6 8 10

Powering Cangrade Under the Hood

| Solution

9

The value that Cangrade offers is immense. We provide a complete cloud-based candidate screening

platform which uses cutting-edge science and technology to automate, organize and enrich a

candidate’s application with a highly structured, accurate and inclusive database of information.

5%

10% 15%

20%

25%

30%

35% 40%

45%

Validity

1

2 3

4

5

6

7 8

9

Dollars

The Difference

20

40

60

80 100

120

140

160

180

0 0 0 0 1 5

Min

÷ 10

Speed

Cost Accuracy

| Solution

10 | Platform Overview

Set-up The Job

11

Assign Tests

| Platform Overview

12

Your Job

Share the Job

| Platform Overview

13

YOU DO NOTHING

(coffee on us)

| Platform Overview

14

Choose the Best Candidates

| Platform Overview

15

See the Candidate’s Personality and Match to the Job

| Platform Overview

16

YOU CHOSE THE

BEST PEOPLE!

| Platform Overview

17

What People Think

Believe that the

Cangrade test is not

invasive.

100

80

60

40

84.3%

0

20

Believe that a test

like the Cangrade

can be used for

evaluating job-

candidates.

100

80

60

40

87.2%

0

20

Believe that non-

predictive

Interviews are a

problem for

employers

100

80

60

40

94%

0

20

| Reception

*Results are gathered from 500 survey respondents

18

Core Team

Michael Burtov, CEO

Mike 10+ years in business

development and serial

entrepreneurship.

Gershon Goren, CTO

Gershon former-CTO of WebDialogs

(acquired by IBM in 2007).

Steven Lehr, CSO

Steve Harvard University

psychology researcher.

Dr. Greg Willard, SVP

Greg Harvard University

professor and psychology

researcher.

Gunjan Aggarwal, SPHR, Advisor

Gunjan Global Head, Talent

Management, Organization

Development and Staffing

at Novartis Vaccines &

Diagnostics

Dan Newman, Advisor

Dan More than 25 years of

venture capital, strategy

consulting, and hands-on

management experience.

| Business Profile

19

Business Goals

Simply put: Our goal is to be the leading provider of pre-employment

screening solutions for organizations.

Position Cangrade as a highly simple and efficient way to identify the top talent. Through

the use of well validated and ethical aptitude and psychometric evaluations as well as an

intuitive and robust technological platform.

Create a brand and a household identity in the highly fragmented candidate “screening”

space

Establish and use the BEST strategic relationships

Promote a “center-of-excellence” for ethical and validated hiring methodologies

| Business Profile

20 | Business Profile

Our talent acquisition solutions enable organizations to implement systematic talent acquisition practices

that ensure the efficient, effective and consistent hiring of qualified and talented individuals.

Greater Automation and Consistency

Fairness in Hiring and Workplace Diversity

We provide a powerful tool to mitigate “adverse impact.” The use of Cangrade allows a business to

demonstrate that an interview decision was based on objective, job-relevant criteria. The Cangrade

evaluation is validated to be an excellent predictor of job performance, while mitigating discrimination and

promoting workplace diversity.

More Cost-Effective HR Departments

By automating core talent acquisition, we provide the opportunity to outsource non-core functions and

improve the quality of new hires and employee retention..

The benefits listed here are just a few of those are just a few of the solutions which we enable our

customers to achieve.

Key Strategic Values

21

Our primary approach is establishing and leveraging Distribution Channel Marketing principles.

Distribution Channel partners create awareness and interest for our product, as well as creating larger

customer acquisition and revenue efficiency.

• Dealer Network. We sell our product through a geographical network of dealers who sell to end-

users in their areas. In this model our dealers are essentially our customers, and we have a strong

program to train and support them with marketing campaigns and materials.

• Selling Through a VAR (Value-Added Reseller). We sell our product to a company who bundles it

with services or other products and resells it.. Our VARs work with an end-user to determine the

right products and configurations, and then implement a system that includes our product.

Channel Marketing

5 Partners

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4 5

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Current Channels

Web

Direct Sales

• 55% of adult Americans had at some time purchased

goods or services from a direct selling representative.

Print

• Print media reaches older adults.

• Community print media reach homeowners and community

leaders.

• Print media reaches small business owners.

Direct Sales & Print

Online Advertising Promotes Cangrade

Users try Cangrade

Users give word of mouth

Generates more users

Generates revenue for

online advertising

Sales & Marketing

| Business Profile

22

Pricing

Cangrade leads the industry in pricing. Our pricing strategy is developed for mass market appeal. A fully

enabled candidate evaluation can be conducted for less than $1 per candidate.

Employers

Psychometric

Testing

Skills Testing

Other (i.e. Video

interviews)

Candidates

and Jobs

Hiring

Management

$1*

<$1*

$5*

Unlimited

FREE

Recruiters

$1*

<$1*

< $5*

Unlimited

FREE

Candidates

FREE

FREE

FREE

Unlimited

FREE

| Business Profile

*Per Candidate

23 | Business Profile

Sales by Product

31%

38%

25%

3% 2% 1% Psychometric Testing

Skills Testing

Other Assessments

Affiliate Relationships andSponsored Content

Data Licensing

Other

After the free trial period Cangrade will generate $.75 - $10.00 per candidate evaluated

through the Cangrade website, through the combination of our Psychometric Testing,

Skills testing, Video Interviewing, third party Skill test providers, data licensing, and

affiliate relationships.

Web: Cangrade.com

Phone: +1 (888) 871-8778

Email: info@cangrade.com

Candidate Grading, LLC

Harvard University Innovation Lab (iLab)

125 Western Ave,

Allston (Boston), MA 02134

THE NEXT BIG

THING IN HIRING

Featured in:

… and many more