In the last few months we’ve made impactful changes to the way we review companies. We’re holding ourselves accountable to connecting with founders earlier, finding opportunities outside of our immediate network, and measuring the team composition and commitment to diversity of entrepreneurs we’re evaluating.
To do this, we’ve added a new layer to our investment review process. We’re asking entrepreneurs to respond to a series of questions about their company, vision, business model, competition, team, and what they are aiming to fundraise.
We understand that this information is in your deck. But we want to start the relationship off right by enabling founders to put their deck in their own context. Less gets lost or misinterpreted in translation, you get to control the framing, and we get to review the deck in a way that is immediately shaped by your story.
We’ve been really impressed with the thoughtful submissions we’ve gotten so far, but decided it would be a good idea to share some insight into what we’re looking for in the responses — knowing full well that we won’t get ALL of the following from a questionnaire that takes about 20 minutes to complete — but we want you to have a good understanding of where we are headed as we evaluate your company.
We want to know how obsessed you are with your customers.
We are obsessed with customers, we want you to be too. How well do you know your customers? How are you thinking about them? How are you validating your value proposition from day one? How do they inform your product roadmap and what you’ve built so far? Concrete evidence that proves a customer is interested in buying what you’re selling is what differentiates a potential investment from an idea. Even if you’re pre-revenue, there’s ways to demonstrate customer discovery.
We want to know why your team is going to win.
Our belief that the team is what determines success is fundamental to our identity as a fund and the decisions we make. It’s literally our name. We talk about the three teams — the funding team (us), the founding team (you), and the joint team that we become together. We want to learn about the founding team and the story of how you all arrived at this point. What is each team member’s background and why does it set them up to achieve success? How do you work together to tackle the problem you’re solving? What motivates your team to work together? The team is more than a slide with faces and credentials — it’s the most valuable asset an early stage company has. This is a chance for you to demonstrate the value of that asset.
We want to know how you measure yourself.
It’s never too early to start tracking your progress and measuring yourself against tangible goals and quantifiable targets. As a fund with an entire Portfolio Operations team that is going to work with you every week after we invest, this is a critical factor for achieving alignment. We want to know which metrics you use to track your progress today, what metrics you believe will be important over the next 12–8 months, and what targets you aim to achieve before your next round of fundraising. We’re looking for specific goals for revenue, number of customers, and other KPIs unique to your business model. We want to see that you’re able to honestly assess your performance and set goals that are both ambitious and achievable. If we invest, we’ll work together to add other criteria — but we want to start with what it is that you’ve decided to measure. It’s a clear indicator of what you care about and are prioritizing at this point in the growth of your business.
We want to know how you think BIG and small.
We absolutely want to know what the big picture vision is for your company and how your company is going to change your target market. That’s what tells us that this is a venture backable company, not just a small business. And at the same, we want to see that you’re dug in to the nitty gritty of day-to-day operations, sales, and product development. We want to see that you have a handle on the unit economics and the financials. We want to see that you’ve broken big goals into small steps for the next 3, 6, 12 months. We want founders to convey both their vision and their capability to execute that vision.
We want to know what you’re already proud of.
At the end of our questionnaire, we’ve included a “bonus” question — anything else you’d like to add. We asked this because we understand we don’t always know what else to ask. Some of the most intriguing and impressive answers have included a personal mission statement about what is driving an entrepreneur to build their company, a set of promotional videos about a product, an interview with a founding team, and links to blog posts and publications featuring a company. This bonus add question is an opportunity to show up, let us get to know you, and get us out beyond the deck.
We want to know that you can tell the story.
A last thought — we’ve had people ask why we want all of this written out. A great team that is going places must be able to effectively communicate their story and their plans to any customer, and in this particular situation we are the customer you are trying to sell! We want to see how you can tell the story of your company and make your case for bringing value to customers in multiple formats. Asking you to write it all down serves two purposes — we quickly get the foundation and direction of your business, and we see proof that you can explain in a concise and engaging way.
Our goal is to get to the next right step as quickly as possible and to be respectful of your time. Other people call this getting to no fast, but we think it’s also about getting to yes fast. We want to quickly understand if you are a Squadra fit. That means you have a quantifiable value proposition, traction, a big potential market, reasonable terms, a great team that we’re excited to work with, and that by working with Squadra we will accelerate the growth of your business.
When you hit “submit” on your responses, it goes out to our entire team for review. From this narrative, your screening interview with our investment team, and your first product demo with our Managing Partner, we’ll be well on our way to a fast answer — and if that answer is yes, we’ll have the foundation for creating our Joint Strategic Plan.
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