What do we look at when we evaluate your startup? 🔭
Everything that we look at when we look at you and your startup can be summarized in three big buckets: market, product, and team. Here’s what exactly and why.
Hello, one question we’re often asked is, what is it that you guys pay attention to when you evaluate my startup idea? And there are generally three areas that we look at. There’s the market, product, and team. The market is anything from: is this something that’s new? Is this a worldwide movement? Is there a blue ocean, something that you can fully capture? Or are you entering a very established market, but you’re just ten times better and growing much faster.
Product
Product is everything from UI to UX to the technology behind it, any frameworks that you leverage, and of course; also impressions of how much do people and customers love your product.
And then last but not least, team. That’s the founders, your core team, everyone that’s currently working on your idea, advisors, existing investors, and so on and so forth.
When it comes to the team, it’s a different story.
Not all of these areas are equally hard or easy to evaluate and get on the same page when it comes to opinion within our team. Market and product are typically easier to get the same understanding because it means we can pull data, and these are more hard facts and much more objectively visible. When it comes to the team, it’s a different story. There are a lot more soft factors involved when it comes to evaluating the quality of your team.
How we want to evaluate founders and teams.
So over time, what we’ve done in order to counter that is to build a mental model for how we want to evaluate founders and teams. On the team level, we do like diversity. We think it’s better if a team clearly has founders that fit different pairs of shoes. So that’s there’s no stepping on each other’s toes. And also because the business will always need different roles. It’s clearer from the get-go who’s going to fill which role later down the road.
Evaluating founders
When it comes to founders, we felt the mental model that consists of three dimensions, which are mostly uncorrelated from each other. These three dimensions are clarity, empathy, and execution. Clarity, meaning how concise can a founder express their vision, how quickly can they answer questions? And how short are their typical answers even to open-ended questions? Why is this important? Well, we believe that clarity is a sign that you’ve thought about all these questions a lot. And it’s usually a sign for us that you are a missionary, not a mercenary, meaning you’re trying to solve this problem just because it boxes so much that the world hasn’t solved this problem yet, that you even think about it in your sleep.
Empathy
The second component is empathy. Empathy is important to us because we believe that in order to build a big company, you will be able to attract a lot of talent, and it will be much, much easier to do so if you just have a natural empathy that attracts people to help you, get people behind you to march your attorney and solve that problem and come closer to your vision.
Execution
And last but not least, execution. Execution is important because while down the road, you might have a big team and a lot of staff, with tons of specialists that all take care of their individual roles, responsibilities. In the beginning, we believe it’s crucial that you are very hands-on, you’re involved. And that also, you can just take over and show your team how things should be done in the early days.
Executing the investment
One thing that we watch out for is from the moment that we start talking to each other, to the moment where we either say yes or no, to an investment into your company and potentially even later down the road when we finish our due diligence, and it’s all about executing the investment. How much progress do you actually make from speaking about the initiatives that you’re planning to implement in the next few weeks and months? How much progress do you make of those?
So, in summary, everything that we look at when we look at you and your startup can be summarized in three big buckets, market, product, and team. Market and product are easiest for us, and it’s usually quick for us to get on this same page within our team because there are more hard facts. The team is a bit different. And when it comes to the team, we look at two layers. Number one, your startup founding team, and what we like there is if your team is diverse, and it’s clear that different people will fill different roles, you’re not stepping on each other’s toes. And in second, individual founders, and that’s where we built the model consisting of clarity, empathy, and execution.
So those are the things we will look at when you pitch us your idea. You can do so through the Tomahawk.VC, we’re looking forward to getting your pitch.
And with that, have a beautiful day. Stay curious. I’ll talk to you soon.
