The Founder, CEO scorecard

What I look for in early stage founders (hint, it’s not pedigree!)

More rigorous than the magic 8-ball

When I made the leap from operating into venture earlier this year, I made a commitment to be as transparent as I can about how I operate as a VC.

First off, transparency is what I would offer if I were still an exec. I’m an open book when it comes to how I make decisions, how I hire, what I expect from my team, etc. I try to own and communicate my side of the equation.

More importantly, founders deserve transparency! After all, it’s what we ask of you — share your strategy, insights, plans for building your company.

After getting a pointed question on this recently, I realized that I have a pretty consistent “scorecard” in my head (really just a set of questions and signals) that I mentally go through when getting to know founders. It’s informed by a decade of experience evaluating talent for hiring, studying different leadership styles and CEO personalities and being genuinely curious about what drives outliers to beat the odds.

This goes hand-in-hand with evaluating the product and opportunity space, but for the person leading it all, here’s what I look for and try to get signal on:

  • Motivation — What is driving the founder to build and create? Is there an intense interest, passion or deep personal reason for pursuing the particular problem? It’s not scientific but I want to see fire in the belly, whether its mission or personal conviction. The ‘why’ matters.
  • Curiosity — Is this someone who is open to new data? Is this someone who is interested in others’ perspectives and able to engage with different views? Does the founder seek to understand their customers, partners?
  • Growth mindset — Do they have high velocity of learning and a voracious appetite for personal growth? How fast does the founder up-level their knowledge base, skillset? Are they open to feedback and coaching?
  • Command of the facts — Is the founder well versed in the problem space and/or do they have clarity on the opportunity ahead? It’s not about knowing everything but about demonstrating that they are in command of what is known and unknown, without overselling.
  • Grit and hustle — I probably over-index for this one. In the startup trenches you can’t survive without resilience, grit and walk-through-walls problem solving abilities, plus high velocity execution. Has the founder demonstrated grit through prior work or lived experience? Have they shown resourcefulness or scrappiness? Do they have a knack for breaking down barriers and moving fast as a team?
  • Unique insight —Some people just see the world differently or see things the rest of us don’t see at all. I’m interested in what is the “secret” that the founder knows that no one else does, what’s their unique perspective? It could be the problem space or a future trend or a new product angle, etc. Founders aren’t always able to articulate this explicitly (perhaps because it’s obvious to them?) but it shows up in the product and narrative.
  • Unfair advantage — What is the unique superpower that the founder brings to the table? It could be functional expertise (product + UX), industry experience, deep customer networks, creative vision, or something else. If there’s 5 copycats tomorrow, why does this person win?
  • Integrity — Hard to assess in the moment but easy to evaluate in backchannel references. Is this a trustworthy individual? Do they treat others with respect? (by the way, you can be an aggressive, charismatic, founder that is also respectful, those are not mutually exclusive)
  • Magnetism — This one is stylistic and tricky to evaluate but…a founder does have to be able to get others to join the cause. Can they attract talent with their charisma, vision, zeal or professional credibility?

When someone shows up strong on these, it makes me want to RUN to work with them. Founder and founding team potential is a key factor in early stage investment decisions and frankly sometimes it’s the only one that matters.

With these signals, you can see how a first-time founder early in their career might have a totally different set of strengths than a senior exec or second time founder. It’s more art than science evaluating how these factors add up.

Note, I did NOT talk about pedigree or personality type or company logos.

Holding a fancy degree or having a big title is not a prerequisite, neither is being an extravert or living in Silicon Valley. Certainly relevant experience and networks matter on the startup journey (hence “unfair advantage”) but lazy pattern matching is a bad recipe for investing.

What’s your secret sauce?

Venture is a people bets business. We bet on specific individuals to design new products, construct teams and then execute the heck out of it in the market.

I suspect that every VC has their own way of evaluating who we partner. However we do it, let’s be transparent about what goes into that magical decision-making box. It’s a great way to support diversity & inclusion in tech!

Hi, thanks for reading all the way through! I’m currently a Partner at NEA, investing in early stage founders reimagining how we work, live and play. I’m a serial startup operator, former biz exec (Uber, Twitter) and angel investor. More about me here, find me on Twitter or @annb 👋 Clubhouse.

Thirsty for knowledge, big on impact. Glass 3/4 Full. COO & Biz Dev Exec. Rival, Uber, Twitter alum, angel investor, advisor @January_VC