Decision tree of VC, How I evaluate companies
After the initial screening of a company, which includes a quick look at the addressable market, team, and underlying solution, I look at the future of a company much like a decision tree. At a first meeting I step in with the entrepreneur and create a vision of what needs to happen for the company to be successful and grow the exit we are looking for. I then isolate the bottlenecks and obstacles as I see them. I largely evaluate an entrepreneur on their ability to recognize them and develop a reasonable plan to address them. I will look backwards at the company/ teams track record of overcoming ones in the past. Expect most of the questions I ask to be focused on these areas. If I miss a major obstacle bring it up. It will come up later in the diligence and you will get credit for judgment, forthright and understanding of your business. This also helps to explain why VCs rarely read an entire business plan.
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