How To: Evaluate Startups

When I was at GSV, our venture framework on determining companies to invest in was categorized by the 5 P’s. You can read more about it

here⁠

Although I no longer work at GSV, their 5 P’s, their simple framework on how they evaluate thousands of companies each year has stuck with me in my journey of talking to founders. You can read about their definition of the 5Ps but here is my top 4 P’s.

People: The most important thing I look for is the team and founders. Ideas and businesses can change but in the early stages, the team is what is the most important. I want to invest in people that not only can be a great leader when the company is doing well, but an even better leader during tough times. I also want to invest in people who have the right skills and experience to execute on their vision. I want to invest in people who are passionate about their business and have a clear vision for what they want to achieve & invest in people who are passionate about their customers and solving their problems.

Product: The second thing I look for is the product. I want to invest in products that are solving real problems for real people. These products should have a clear value proposition and are differentiated in the market. I also want to invest in products that have a great user experience and are easy to use.

Potential: Invest in the moonshot companies. The best VCs are visionaries that are able to “predict the future” in some sense or the other. What could be a market that doesn’t exist today could be the next big thing 5 years from now. Don’t be afraid to invest in companies willing to swing for the fences.

Purpose: I want to invest in companies that have a clear purpose and are making a difference in the world. I want to invest in companies that are solving big problems and are making a positive impact that will have lasting impact on how our world operates.

Check out other Investment Fund Rubrics

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Argon VC⁠

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Forge Venture Rubric⁠

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