Ulu Startup Evaluation Rubric copy
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Criteria Overview
This rubric is derived from Ulu's medium post on how they evaluate seed stage enterprise startups.
Criteria Details
Aspect
Evaluation Criteria
Ulu Fit
Seed Stage
Show guidance- Poor
- The startup is post Series A stage and has already had significant investment.
- Weak
- The startup is in Series A stage and has had investment already.
- Good
- Strong
- The startup is ready for seed stage investment and has had no other investment yet.
Enterprise IT
Show guidance- Poor
- The startup is not enterprise IT and not SaaS, Smart Data/Predictive Analytics, EdTech, FinTech or LegalTech.
- Weak
- The startup is not enterprise IT and way outside of Ulu's expertise.
- Good
- The startup is enterprise IT, but not one of SaaS, Smart Data/Predictive Analytics, EdTech, FinTech or LegalTech.
- Strong
- The startup is enterprise IT in one of SaaS, Smart Data/Predictive Analytics, EdTech, FinTech or LegalTech.
Diversity
Show guidance- Poor
- 0% women, 0% minority and 0% immigrant.
- Weak
- >=25% women, >=25% minority or >=25% immigrant.
- Good
- >=50% women, >=50% minority or >=50% immigrant.
- Strong
- >50% women, >50% minority or >50% immigrant.
Location
Show guidance- Poor
- Based far away from Silicon Valley and not connected to Stanford
- Weak
- Based in within a 3 hour Silicon Valley and not connected to Stanford
- Good
- Based in Silicon Valley or connected to Stanford
- Strong
- Based in Silicon Valley and connected to Stanford
Market Opportunity
Compelling Customer Problem
Show guidance- Poor
- It is unclear if the product solves a customer problem.
- Weak
- It is unclear whether the product solves an important customer problem.
- Good
- The product clearly solves a top 5 customer problem.
- Strong
- The product clearly solves a top 2 customer problem.
Traction
Show guidance- Poor
- No traction.
- Weak
- Minimal customer traction from high touch sales effort.
- Good
- Some customer traction, but requires some sales effort.
- Strong
- Viral customer sales.
TAM
Show guidance- Poor
- TAM is clearly less than $1B
- Weak
- TAM is about $1B
- Good
- TAM is clearly more than $1B
- Strong
- TAM is clearly more than $10B
Focused Go-To-Market Strategy
Show guidance- Poor
- Startup spends significant time in sales with little results.
- Startup has no plan for landing customers.
- Weak
- Startup has a plan for landing customers, but has had limited success..
- Good
- Startup has a strong plan for landing customers.
- Strong
- Startup demonstrates the ability to efficiently disqualify sales prospects and prioritize their sales efforts.
- Startup has an unfair advantage in landing initial customers and has coherent plans for developing a critical mass of customers in one niche of their market before expanding to other markets.
Team / Market Fit
Domain expertise
Show guidance- Poor
- The startup has no expertise in the complicated domain it is targeting.
- Weak
- The startup has limited expertise in the rudimentary domain it is targeting.
- Good
- The startup has some expertise in the domain it is targeting.
- Strong
- The startup has a track record showing expertise in its domain.
Committed team
Show guidance- Poor
- The startup is a side project for the founders.
- Weak
- The startup is a side project for 50% or more of the founders.
- Good
- The founders don't demonstrate significant energy and enthusiasm to the startup, but are 100% focussed.
- Strong
- The startup founders are focussed 100% to the startup and demonstrate a significant amount of energy and enthusiasm.
Fit for Early Challenges
Values
Authentic Voice
Show guidance- Poor
- Founders are neither inspiring nor demonstrate authenticity.
- Weak
- Founders are somewhat authentic, but exude no inspiration.
- Good
- Founders are authentic, but exude limited inspiration.
- Strong
- Founders are comfortable in their own skin, have an authentic voice, and thoughtfully seek to behave in alignment with their articulated values.
- Founders have inspiring vision and character.
Ethics
Show guidance- Poor
- Founders exude limited trust.
- Weak
- Good
- Strong
- Founders are self-aware, intellectually honest, and proactively look to understand and communicate the “whole truth” of a situation or material information to build trust and fruitful relationships in business.
Character
Show guidance- Poor
- Weak
- Good
- Strong
- Founders exhibit servant leadership.
Product
Learning Orientation
Show guidance- Poor
- Founders are rigid in their ideas.
- Founders are unwilling to accept criticism.
- Weak
- Good
- Strong
- Founders demonstrate agility and enthusiasm to learn.
Enterprise IT Appreciation
Show guidance- Poor
- Weak
- Good
- Strong
- Founders clearly appreciate the complexity of enterprise IT adoption, especially with regard to human and organizational factors.
Demos
Show guidance- Poor
- Demos are unavailable.
- Weak
- Demos exhibit product features, but not customer value.
- Good
- Demos exhibit limited customer value.
- Strong
- Reliable demos clearly exhibit the customer value of the startup.
The Whole Product
Show guidance- Poor
- Founders are just focussed on solving a technical problem with little thought towards customer culture and context.
- Weak
- Good
- Strong
- Founders are sensitive to whole product issues such as the psychology of end users, the culture and context in which the solution will be deployed, and a disciplined process to observe what users do as opposed to what users say they do or will do.
Financial Viability
Valuation
Show guidance- Poor
- Estimated to achieve less than a 10x probability weighted multiple on invested capital.
- Weak
- Estimated to achieve about a 10x probability weighted multiple on invested capital.
- Good
- Estimated to achieve about a 50x probability weighted multiple on invested capital.
- Strong
- Estimated to achieve about a 100x probability weighted multiple on invested capital.
Business Model
Show guidance- Poor
- Business model has low margins.
- May have a limited time horizon.
- Weak
- Good
- Strong
- Business model has high margins that scale.
- May have a flywheel effect.
Dilution
Show guidance- Poor
- The startup equity is already distributed amongst a number of stakeholders including founders plus outside investors.
- Weak
- Good
- Strong
- The startup has no equity partners aside from the one to two founders.
Exit Possibilities
Show guidance- Poor
- There is no clear exit possibility.
- Weak
- Good
- Strong
- Clear exit possibilities including M&A exist.
Super Powers
Competitive Advantage
Show guidance- Poor
- The startup is in a market with many competitors focussed on solving the problem in a similar way and with similar capabilities.
- Weak
- Good
- Strong
- The startup is in a large overlooked market solving painful problems with competitors whose primary super power is customer inertia.
Network Effects
Show guidance- Poor
- The startup is not based on benefitting from any network effect.
- Weak
- Good
- Strong
- The startup will clearly benefit from a network effect - marketplace, social, data, platform or other.