How We Evaluate Companies: Our 8 T Framework
TLDR
- byFounders uses eight criteria – Team, TAM, Timing, Traction, Technology, Transformative, Transparency, Tomorrow – to structure early-stage investment decisions.
Key Takeaways
- Team first: byFounders invests in founders, not ideas; complementary skills, prior collaboration, and co-founder relationship strength are weighted heavily.
- TAM method: Bottom-up sizing (potential customers x revenue per customer) is preferred over top-down studies; emerging markets outrank large established ones.
- Timing over first-mover: Entering a market first does not equal winning it; Skype is cited as a model – not first with VOIP, but timed around flat-rate internet pricing and peer-to-peer architecture shifts.
- Traction is stage-relative: Pre-seed and Series A expectations differ; any signal (beta feedback, early paying customers, evangelists) counts, alongside a clear Minimum Viable Distribution strategy.
- Transparency is formalized: byFounders coined the term “ugly slide” and explicitly requests it – areas where help is needed, not a polished pitch.
Why It Matters
- The framework is a public articulation of how a specific VC firm filters deals, giving founders a concrete checklist of what byFounders actually weighs rather than generic VC platitudes.
- The “Tomorrow” criterion excludes companies with net negative impact and requires founders to demonstrate conscious, ongoing improvement – not just a one-time ESG slide.
- Portfolio examples named include SafetyWing (global safety net), Qvin (period blood diagnostics), and Quantica (multi-material 3D printing), illustrating the transformative-category bar byFounders applies.
byFounders · 2025-06-10 · Read the original
