Technically Speaking

As a venture partner and scout for VCs, I conduct due diligence on target companies and assist in hiring talent for portfolio companies. When vetting possible investments I look closely at the management team, competitive landscape, addressable market, and product/market fit. I also have to take a long look at the technical aspects of the product. When assisting portfolio companies, I lead the charge on developing a clear hiring strategy and vetting candidates for various technical and non-technical roles. So you may be wondering how do I conduct due diligence on technically complex products and vet engineers and developers for key roles in a portfolio company? The answer is I leverage the relationships I have built of entrepreneurs and engineers within the startup ecosystem who can provide me with a technical perspective on the quality of startup’s product or a developers’ previous work.

However, of the years, I have been able to identify key questions that I like to answer on these issues before I have my engineering or domain experts take a closer look. Below are a few suggestions I have for nontechnical investors who are conducting due diligence or nontechnical CEOs who are looking to hire a developer or bring on a technical co-founder.

Non-technical Investor Due Diligence Tips:

• Purpose & Problem/Solution Fit: First and foremost when looking at a tech product it always a good idea to check out a demo so that you can better understand a first-time user’s experience. Then you can have a better perspective of what problem does the product solves.
• Secret Sauce: Next you want to determine what is the startups’ “secret sauce?” What differentiates the product from its competitors? Is it a patent, algorithm, or technical approach?
• Management Credibility: Lastly, after you have developed a hypothesis on the purpose, problem/solution fit, and the secret sauce, then you need to examine the technical team’s ability to execute. I look at what the CTO and developing team have created in the past and if the experience has led them to be able to build a suitable product that meets the expectations of purpose, solution, and secret sauce that my due diligence suggests.

After I have developed sound hypotheses on these areas then I leverage my engineering and entrepreneurial contacts to get a third party perspective.

Non-technical Founder Hiring Techie Tips:

When I work with non-technical founders who have no engineering background and are looking to add a CTO or expand their development team, I typically suggest the following tips for determining the candidacy for each prospective engineer:

• Portfolio of Work: Every developer should be able to point you to previous work. You want to look at their past portfolio to see what they have built in the past. I also remind non-technical founders to make sure each candidate is able to point to exactly what they have contributed to in the building of an app or platform.
• Day Trial Exercise: After you have determined what the candidate has built. It is always important to determine if you work well with the techie. Since engineers are notoriously terrible at estimating time, one way to determine if the candidate would be a good fit is to do a 1-day feature trial period. In the exercise, you should create basic mockups of the one feature you would like to add to your product or have them conduct paired programming with a current member of your development team. This gives you an opportunity to determine if a candidate is able to work well with your team within a time-sensitive deadline.

These are my suggestions but I would be interested in knowing what other suggestions you have for non-technical investors and non-technical founders when evaluating market opportunities or engineering candidates, respectively.

Earnest Sweat is a Startup Adviser and Business Ops professional for various accelerators. Sweat specializes in sourcing, managing and mentoring startups within the fin tech, ed tech, and real estate tech sectors. If you have any questions, comments or requests please connect with Earnest through LinkedIn,Twitter, or AngelList.

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