Here's the survey that $100 million VC fund Sinai Ventures uses to get direct feedback from its portfolio company founders
The first question dives right in and asks how our entrepreneurs rate us on a scale of 1-10.
This gave us a quantifiable rating, which we used to calculate our Net Promoter Score (NPS). NPS allows us to track our performance and founder rating over time, so we can be sure to hold ourselves accountable.
We also wanted to know how founders thought their investors (including us) could be most helpful to them and their companies.
In addition to offering eight high-level categories, it was important to include an open-ended "Other" option, in case founders had a request outside of these domains.
Unsurprisingly, founders rely on their investors first and foremost to help when a subsequent fundraising process is underway.
Fundraising help may include giving feedback on a pitch deck, pitch practice, and most importantly making introductions to other investors. Customer introductions, PR, and recruiting help are also highly valued.
The "other" responses primarily specified other types of introductions and networking help that founders desired. Interestingly, no one wanted their investors' help on their product!
We also included a classic question that investors ask entrepreneurs, "What keeps you up at night?"
Knowing our founders' biggest worries and concerns empowers us to focus on helping them in those areas, so that they can sleep easier.
It's no surprise that customer acquisition, hiring, and growing revenue were the top concerns of founders.
If a company can solve these challenges, other challenges (raising follow-on capital, market corrections, competition) are easier to face.
Depending on the stage of the company, some startups are able to raise capital very quickly, while others may spend many months fundraising.
However, fundraising traction/speed (especially at early stages) isn't always correlated with the eventual outcome of a company. Some of the most successful companies had difficulty fundraising at some point, while others that have easy access to capital don't always meet expectations.
A majority (75%) of respondents raised their most recent fundraising round in 1 to 3 months.
A lucky 11% were able to raise in less than one month, while the remainder took 4 months or more to close their rounds.
So how many pitch meetings are generally necessary for founders before they close a round?
As investors know (and founders should understand), most pitches do not result in an investment. VCs typically invest in a small percentage of all the deals that they see. This gives entrepreneurs the opportunity to practice and evolve their pitch, incorporating feedback and addressing major concerns from previous pitch meetings.
Over half of respondents pitched at least 21 different VC firms, with over a quarter pitching more than 30 VCs.
When given a choice, what factors do founders consider in choosing their lead investor?
With so many sources of capital for startups these days, VCs look to differentiate themselves to make their case to founders.
Differentiation could include services they provide, market expertise to be proffered, strategic personal connections to be made, or even the brand and reputation of the firm itself. My hypothesis was that the most important factors for founders choosing a lead investor would be Deal Terms, a Firm's Brand, and Individual Partner Expertise.
Surprisingly, it turns out that deal terms and a firm’s brand were not as important as the “enthusiasm and alignment” and “good character” of investors!
This feedback emphasizes that reputation is imperative for VCs, and that showing passion and having conviction about a company can win deals — even if another firm has a stronger "brand" or offers better terms.
With the growing popularity of incubator and accelerator programs, we were curious if program graduates would recommend them to other entrepreneurs just starting out.
It's more and more common for early-stage startups to enter accelerator or incubator programs, as these programs themselves proliferate behind the success and prominence of Y-Combinator and TechStars. But are they worth it?
In fact, the vast majority of founders do recommend their incubator/accelerator program to other founders.
We’re always working to find the right balance of support, introductions, and check-ins with founders without becoming overwhelming or overbearing. To take advantage of the opportunity to hear directly from a large number of founders, we also asked them which books they would recommend to each other, in order to share the results with all of our portfolio companies’ founders.
"The Hard Thing About Hard Things" by Ben Horowitz was the no. 1 recommended book, while other recommendations focused on categories outside of entrepreneurship, such as creativity and happiness.
Personally, I was surprised with the diversity of recommended books — only 4 books were recommended by more than one founder!
One internal debate was whether or not to keep this survey anonymous in hopes that it would compel “more honest” feedback.
Ultimately, we decided that trust and honesty is imperative to our relationships with founders, and that we could only address specific concerns/feedback if we knew who provided it. In our email to founders with the survey link, we asked earnestly that they answer candidly, even if they felt a little uncomfortable.
There you have it — the simple founder feedback survey that Sinai Ventures uses to continuously innovate and improve as investors and partners.
Re-issuing this survey on a regular basis allows us to track our progress and be held accountable by our most important partners.
Mike Raab is a writer and investor at Sinai Ventures in San Francisco. He blogs about a variety of topics including media, technology, and venture investing at TheRaabitHole.com and on Twitter at @hithereimmike.
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