As thesis-driven, Seed-stage investors, we often diligence and invest in enterprise startups pre-revenue. This means founder’s often come to the table with no customer logos or clear-cut metrics to help us generate conviction. So the question we’re frequently asked is:
How do we evaluate startups at the Seed stage when there aren’t any metrics? And what can founders share to generate investor interest?
First, we ask founders to build a narrative around their go-to-market vision. One mantra my co-founder Jess always stresses to our founders is that “it’s not in the Number, it’s in the Narrative.” To help founders craft this narrative, we put together a go-to-market template that founders can walk through with investors during Seed-stage fundraising meetings.
In this template, you’ll see prompts on how to organize a narrative around your customer discovery and qualification criteria, go-to-market plan of attack, and overall company growth story. At this point, information might mostly (or entirely) be hypothetical and will likely evolve over time as you build out your product and get better acquainted with your ICP (ideal customer profile). However, giving Seed investors a glimpse into how you think, strategize, and understand the market is key in them visualizing your future scale.
Second, we tap our corporate network to give us the down and dirty scoop on what their top pain points are in the enterprise today, if a startup’s approach aligns with their use case needs, if the product architecture can scale to meet enterprise requirements, if their security controls will support highly regulated environments’ needs, and a lot more. This “invisible metrics” layer is incremental to all the standard work investors perform across evaluating a team, their product, their market, etc.
Together, this paints a holistic picture (as holistic as possible at this stage) of whether the startup will be able to execute its go-to-market strategy, scale, and succeed.
If you’re thinking about launching an enterprise software or SaaS startup or have already taken the leap, it's never too early to connect with us. We’d love to meet you to learn more about what you’re building, share our best feedback, and plug you into our enterprise community where helpful.
Thanks to Daniel Chesley and Priyanka Somrah for their help creating this template.