Moonstone: Our Startup Selection Process
At Moonstone, we have identified a process that supports us being consistent, efficient and accurate in evaluating all the founders we meet.
Every year we’ll meet 1.000 founders, with the goal of committing — from the very first moment — to invest in 60 of them, over the next two years.
Our ticket size is €10–50k and we always operate as followers and co-investors.
To make Moonstone’s selection process more transparent for founders and other VCs, we decided to make it explicit in an article.
To ensure that we efficiently evaluate each founder, we have built a process that helps us map out a set of information to be made available to the whole Moonstone team and its network of LPs, through a 15-factor matrix.
This matrix gives us a framework to track and determine — once completed — our investment decision, based on the information gathered on each of the 15 factors.
We divided the matrix into 4 categories
- team,
- product,
- market,
- fit with Moonstone.
Each of these categories includes key factors that we evaluate individually, assigning each one a score from 1 to 5.
This ensures we have full visibility into the metrics that are critical to us.
The process begins with a very short form that takes 5 mins max, which allows us to understand if the startup is working on something that fits with our statement or not.
If so, within two days we ask founders to go a bit deeper, through a more detailed form we send to them (this one takes about 40 mins).
As soon as founders fill out the form, we check all the answers entered and decide wether or not to deepen the knowledge of the team and the solution.
If we’re interested in knowing more about the founders and the startup, we organize a 30-minute meeting in which we delve into issues of interest to us, to understand whether the investment is defensible or not.
After the meeting — within 14 days — we officially decide wether or not to invest, and in the event of a positive outcome we share our standard agreement with the founders.
FYI — here are the metrics we evaluate:
Team
Ability to listen
Ability to attract talent
Commitment
Founder-market fit
Team confidence in doing 3x within 18 months
Ability to execute
Clear milestones
Product
Product feasibility
Capital intensity
Timing
Strength of value proposition
Market
Defendability of competitive advantage
Comprehension of the problem
Market saturation
Moonstone fit
MS value add
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