Bottom line question for judges:
“Which team would you hire?”
VCIC Judging Criteria Overview
(see actual judge form here)
SOME THINGS TO CONSIDER:
- There is a lot of room for interpretation in these criteria, and different VCs, firms and geographical regions will have different cultures and opinions about how to be the “best VC.” It is worth looking at your specific event website to see who is judging the event to get an idea what they might be looking for. For example, if there are a lot of corporate VC judges at your event, you can expect that they may interpret the criteria differently than seed investors would.
- Don’t let the “points” above confuse you; the process is more qualitative than quantitative. An analogy might be the Olympics or a beauty pageant: everybody competing is very smart and talented. The judges have the difficult challenge of assessing which team would be the “best VC.” Often this means fishing for mistakes to rule out some teams.
- In the hunt for mistakes, some judges may dive deeply into the term sheet to see how much the team understands the implications and intricacies of each term. This can seem frustratingly trivial, but it is one way to differentiate teams.
- When it comes to the key terms, particularly the investment size and pre-money valuation, the judges want to hear that you are thinking like a VC. Make sure to watch the training videos and take a look at the VC Razor Return Analysis Worksheet.
- Judges also care a lot about how you demonstrate value as a firm, as this is an important part of the business (especially in boom times). This creates a dilemma for young teams who don’t really have any experience or a network. How much should you game it? There is no single strategy that works best. We recommend being natural and demonstrating that you’ve thought it through, while not being too goofy on the gaming it front. For example, don’t recommend your uncle Bill Gates as a board member, but DO check LinkedIn and find someone who would be a good fit, and perhaps game it by saying that individual is an entrepreneur-in-residence with your firm.
- When you receive feedback at the end of the day, you will often hear that you made some technical mistake that may seem trivial to your team. This may be because that technical mistake was the easiest thing to point to rather than the complexity of, say, a really bad performance in due diligence caused in part by your abrasive personalities, which can be difficult feedback to give. Keep in mind that it is rarely for some single reason that your team did not win (just like it is almost never a single reason people break up with one another, though they may point to one).
- The way the judging works is that each judge keeps notes and scores along the way on a judging form. After the partner meetings, each judges votes for their #1, #2 and #3 team, given the question, which team would you hire? We do not collect the forms. We encourage the judges to use those for feedback.
- To get the winners, we score 3 points for every #1 vote, 2 points for every #2 vote, and 1 point for every #3 vote. We ask the judges to vote with no discussion or deliberations so that we can get back to the teams with more time for one-on-one feedback at the end of the day.
DUE DILIGENCE (20 pts)
- How well did the team cover what you consider the key issues/questions?
- How did the team seem to understand the business opportunity and strategy?
- To what level was the team able to establish appropriate rapport with the entrepreneur?
- How appropriately did the team lead/control the meeting?
- How well did the team dig into the right issues?
- How skilled was the team at getting information (not just asking a list of questions)?
- To what level did the team appropriately demonstrate their value as a VC firm to the entrepreneur?
- How well did the team demonstrate an understanding of the financial requirements of this deal?
- How well did the group appear to work together as a team (as best you can tell)?
TERM SHEET (20 pts)
- Reasons to invest
- Reasons not to invest
- Overall decision
- Aligned interests between VC and entrepreneur
- Valuation, investment size, syndicate, fund fit, option pool, other terms
PARTNER MEETING (20 pts)
- Demonstrated VC knowledge
- Adequately explained deal
- Addressed key issues
- Confident and convincing
- All members contributed