At the start of every program you need applications. Putting together an application form is something that will set the tone for the whole program. It also determines how easy it is to make the decision for the evaluators.
There are different types of questions to ask, but the main things to remember is to keep it short and simple while still getting maximum information. A number of general questions are mandatory. A block of marketing questions will help better target the next set of applicants. In terms of the startup itself we will now discuss 5 must-have questions in application forms.
Has your team worked together before
The answer to this questions has a number of aspects to analyse. How long do they know each other as well as what are the circumstances of their relationship. The longer people have known each other, the smaller the risk they are not able to work together due to personality issues and work styles. Basically not have a fight and break up the team. When people enjoy each others’ company, they are more likely to solve conflicts and be motivated to support each other. Being friends is good, even better if the founders have worked together in a business capacity. Best case scenario if the exact same founders have already had a previous startup journey together. In conclusion- the longer track as a team, the lower the founder risk.
Describe your in-house technical capacity
Having the capacity to develop the product in-house is vital to technology startups. The control over intellectual property as well as the source code is something to take very seriously. This is why evaluating the technical talent in the team will help assess the success ratio. The better quality and more motivated the technical talent, the less risk of product failure. Working with outside talent is not a bad thing in itself, getting part time expertise on board when it does not make sense to hire them full time is sensible for the budget. Outsourcing the core product means the team is depending on someone that can drop the product and leave any day. In conclusion- the better the in-house technical quality, the lower the product risk.
How are the shares split between the founders
It is important to understand the underlying motivation of the founding team. There are teams with only one founder or a founder that holds majority and then there are those that have equal founders. At the end of the day, investors prefer equal founders. If only one person is calling all shots, usually the others are feeling left out. If the core team feels like employees rather than owners, it is difficult for them to motivate themselves long term. When that startup takes in investors, the shares of all founders will get diluted. Next round of investment will bring another dilution. At the end of the day the shares will be so small that the founders with smaller stakes might not even feel they own anything. One way or the other this will come back and harm the startup. In conclusion- the more equal the spread, the higher is the founder motivation.
What is your vision for the company
Establishing a company is nice, but what is the end goal- now that is the million dollar question to ask. Or should we say billion. Great founders present huge visions, but they also envision the path to that end goal. If a team does not really know what they want to achieve with the product, then they are not clear what to work for. The size of the vision should demonstrate the founder’s grasp of the market as well as the courage to think big. If they do not think big, investors will not see the returns they are looking for. The second half is the path to that vision. Understanding how to achieve something step by step is a crucial art of setting up operations. Most products will get pivoted in any case, but having a vision and changing it is different from not having one. In conclusion- the more specific/realistic the grand vision, the lower the market risk.
How do you plan to exit
Now this is my favourite one. It is both easy to answer as it is hard. Everyone can list a number of options- buyout by a large corporate, IPO, M&A. The key is to be able evaluate if the team actually has thought about it or just written something for the sake of it. From one side it demonstrates how well the team knows the players on the market (possible buyers) and can analyse any match with their product range. On the other side it shows just analytical thinking and understanding the amount of work this result takes. The more precise the milestones to exit, the better the business acumen of the team.
These were my 5 must-have questions in application forms. Some are better than others depending on the stage, sector and type of companies you are looking for. Perhaps giving some insight on how we have looked at the application questions will inspire some thought for your next applications!