“What you’ve accomplished is really great and we’re excited to introduce ourselves and chat a bit more. Would you be willing to share your application to [incubator/accelerator] with us so that we can use it as a way to collaboratively discuss what you’ve learned since then?”

For many accelerators and incubators, demo days kick off a fundraising process for a full round or additional capital based on inbound demand. Homebrew’s focus is ~8 or so seed commitments per year, and we’re putting dollars, sweat and reputation behind those companies ongoing. As a result our investment process is geared towards giving teams a chance to understand what it’s like to work with us and, on our end, confirming that we can be a good partner to the founders. Sometimes we already know the team but what happens when you’re meeting them for the first time on demo day and want to accelerate towards familiarity?

Well, instead of just focusing on where the company is today and what the go-forward plan looks like, I’d add a perhaps counter-intuitive discussion: where they’ve come from, using their accelerator/incubator application as a starting point. Why “waste” time looking backwards? Two main reasons:

1. Evaluate Learning, Not Just Milestones: every demo day presentation – complete with ‘up and to the right’ curve – is marketing. It’s the best attempt to showcase where this company is today and where they hope to go. Reviewing their application, which is usually 5-6 months old, provides a sense of who they were at that time, what they thought was important and how they ‘pitched’ themselves then. I wouldn’t expect it to have fully or accurately represented the future any more than a Five Year Plan at seed stage is a true roadmap, but it does serve as another “dot” for us to connect the dots and “draw a line.”
2. Cultural Alignment: Are we going to have a long, productive relationship where we can trust one another and Homebrew can put 100% of itself behind helping you build a company that you’re proud of? That’s probably the central question we look to answer during a fundraise and equally, we want to display to a founder that we’re going to be worthy of their trust and commitment ongoing. Reviewing the application together shows you how an investor will react to founders making decisions with incomplete information. Will your investors want everything to be neat and tidy all the time (and cause you grief when it isn’t) or do they understand that building a company is difficult and messy? Are they investing in the glossy Instagram version of you, or are they investing in the real you? The messy version. The high-potential version. The version that sometimes needs a pat on the back or a kick in the ass. That’s who we invest in. So, to me, finding a way to ‘get real’ during an accelerated fundraising process creates mutual signal as to whether we’re going to be a good fit for one another. Because if not, let’s find that out now, not 1, 10, 100 days after we’ve lashed ourselves to each other.

In reflecting, perhaps this isn’t just the “one question” investors should ask founders, but one founders want to offer up. Take your potential lead investors through your evolution, not just your pitch deck. My bet is anyone you “lose” wasn’t the right investor for you to begin with. And you might just end up with better investors who are committed to the journey with you, not just the demo day hype.