Quick evaluation of a deal pre- and post-founder call

Hi! I’m glad you’re here. You’ve made it to issue #24 of VC Demystified🪄.

My name’s Nicole - I’m a Principal at an early stage venture fund, and I know firsthand that VC can often be a black box. Breaking into the industry may feel daunting and resources can seem scarce and inaccessible. I wanted to put together a newsletter to give others the playbook I wish I had when I first started.

Please let me know topics you want me to cover! Shoot me an email. Any and all suggestions are welcome 🙂.

Today’s deep dive: Red flags to look for when quickly evaluating a new investment opportunity before deep diligence

My personal mission is to open as many doors as possible for other people and this newsletter is just one avenue to do that. As always, I will continue to post VC insights daily across my socials for those of you who prefer those channels.

Red flags to look for when quickly evaluating a new investment opportunity before deep diligence

I often get the following questions from aspiring VCs regarding deal evaluation:

- After I source a deal, how do I know which founder calls to take?
- Post-call, how do I know if it’s a compelling opportunity?
- And how do I evaluate the deal quickly given the volume of deals I see?

Evaluating early-stage startups can be tricky, but knowing where to look for warning signs is crucial.

The first step always is to make sure the company fits your firm’s investment thesis.

Once it does, it’s time to dig deeper.

Here’s a quick teaser of what we’ll cover in this issue to help you become a smarter and more efficient investor:

• Why the founding year might raise eyebrows

• What frequent management changes could mean

• How previous funding raised reveals efficiency

• What to look for in revenue trends

• Why a high burn rate can be a red flag

Founders this could be helpful for you too…

Let’s get into it!

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