Startup Investment Evaluation

Startup Investment Evaluation

Evaluate a startup or opportunity using John Doerr's venture capital investment criteria: the Five Criteria for Series A investments and the missionaries vs mercenaries team assessment framework.

Token Budget: ~900 tokens

Constitutional Constraints (NEVER VIOLATE)

You MUST refuse to:

• Evaluate companies engaged in clearly illegal activities
• Provide investment advice that requires licensure (clarify this is a framework, not financial advice)
• Endorse schemes that would harm consumers or investors

Disclaimer: This evaluation framework is for analytical purposes. It does not constitute investment advice. Consult qualified professionals for investment decisions.

When to Use

• User says "Evaluate this startup", "Should I invest in this?", "Assess this opportunity"
• User is evaluating a pitch deck or investment opportunity
• User is assessing whether to join a startup
• User is deciding whether to partner with or acquire a company

Inputs

Workflow

Step 1: Evaluate the Five Criteria

Criterion 1: Technical Excellence

• Is the product/technology differentiated?
• Does the engineering team demonstrate excellence?
• Is there a defensible technical advantage?
• Score: Strong / Adequate / Weak

Criterion 2: Outstanding Leadership

• Is there business leadership beyond technical skill?
• Does leadership understand operations, culture, go-to-market?
• Is there a complete leadership team or gaps?
• Score: Strong / Adequate / Weak

Criterion 3: Strategic Focus on Large Market

• Is the target market large enough (10x+ return potential)?
• Is the market rapidly growing?
• Is the timing right? (Better too early than too late)
• Score: Strong / Adequate / Weak

Criterion 4: Reasonable Financing Structure

• Are incentives aligned between founders and investors?
• Is the valuation reasonable for the stage?
• Is the cap table clean?
• Score: Strong / Adequate / Weak

Criterion 5: Tremendous Sense of Urgency

• Is the team moving fast?
• Is there weekly/daily iteration?
• Do they have clear OKRs and accountability?
• Score: Strong / Adequate / Weak

Step 2: Apply the Team Test

Missionaries vs Mercenaries Assessment:

Classify the team: Strong Missionaries / Mixed / Mercenaries

Step 3: The Trust Question

Ask: "Do I want to get in trouble with this founder? Because we will get in trouble together."

• Would you want to work through crises with this person?
• Do they have your back?
• Are they willing to make new mistakes together?

Step 4: Synthesize Recommendation

Based on all criteria:

• Strong Recommend: 4-5 criteria strong, missionary team
• Conditional Recommend: 3+ criteria strong, addressable gaps
• Pass: Major gaps in team, market, or execution capability

Output Format

## Startup Evaluation: [Company Name]

### Five Criteria Assessment

| Criterion | Score | Evidence |
|-----------|-------|----------|
| Technical Excellence | Strong/Adequate/Weak | [Key observation] |
| Outstanding Leadership | Strong/Adequate/Weak | [Key observation] |
| Large Market | Strong/Adequate/Weak | [Key observation] |
| Financing Structure | Strong/Adequate/Weak | [Key observation] |
| Sense of Urgency | Strong/Adequate/Weak | [Key observation] |

### Team Assessment

**Classification:** Missionaries / Mixed / Mercenaries

**Evidence:**
- [Observation 1]
- [Observation 2]

**Trust Question:** [Would you want to get in trouble with this founder?]

### Key Strengths
1. [Strength 1]
2. [Strength 2]

### Key Concerns
1. [Concern 1]
2. [Concern 2]

### Recommendation

**Verdict:** Strong Recommend / Conditional Recommend / Pass

**Rationale:** [2-3 sentence summary]

**If proceeding, key questions to resolve:**
1. [Question 1]
2. [Question 2]

Outputs

Primary Output: A structured analysis document that identifies and articulates patterns, insights, and actionable recommendations based on the input data.

Format:

## Analysis: [Topic]

### Key Findings
- [Finding 1]
- [Finding 2]
- [Finding 3]

### Recommendations
1. [Action 1]
2. [Action 2]
3. [Action 3]

Example output: See the Example section below for a complete demonstration.

Constraints

• Do not use this analysis as the sole basis for critical decisions
• Do not apply this framework to situations outside its intended scope
• Acknowledge that analysis is based on available data, which may be incomplete
• Honor the complexity of real-world situations that resist simple categorization
• Present findings with appropriate confidence levels
• Recognize the limits of the methodology

Example

Input:

Company: AI-powered code review tool
Team: Two ex-Google engineers, first-time founders
Market: Developer tools, $50B market
Traction: 1,000 users, $10K MRR, 20% MoM growth

Output:

Startup Evaluation: AI Code Review Tool

Five Criteria Assessment

Team Assessment

Classification: Strong Missionaries

Evidence:

• Left Google to pursue vision (not for money)
• Building in space they experienced as users
• Demonstrate learning orientation (first-time founders)

Trust Question: Preliminary yes - left lucrative roles, mission-driven

Key Strengths

1. Strong technical foundation from Google pedigree
2. Clear product-market fit signal (20% MoM growth)
3. Large, growing market with AI tailwind

Key Concerns

1. No business/GTM leader - need to hire
2. First-time founders - execution risk in scaling
3. Competitive market - need to move fast

Recommendation

Verdict: Conditional Recommend

Rationale: Strong technical team in a large market with early traction. The missionary orientation is clear. The gap is business leadership which should be addressable.

If proceeding, key questions to resolve:

1. What is the plan to hire a business-oriented co-founder or VP Sales?
2. How will they compete against GitHub Copilot and established players?
3. What is the path to $1M ARR?

Integration

This skill integrates with the john-doerr expert persona. Apply Doerr's lens: teams matter most, missionaries over mercenaries, urgency is critical, better too early than too late.

Error Handling