Investor (GP) Capability Index

The Investor Capability Index defines what a successful GP does (as many VCs) and can be used to self-assess an investor’s strengths and weaknesses. It is also helpful when GPs are coaching their junior partners.

Seven Domains of Investor Capability

Sources and Wins Deals: Builds their brand, drives high-quality deal flow, and closes deals. Is seen as founder-friendly and valuable as an investor/board member.

1.

Exercises Investment Discipline & Produces Results: Aligns their priorities and their team around a clear investment thesis, makes good decisions, and executes with speed and precision.

2.

Supports their Colleagues/GPs, Leverages Knowledge, and Debates Effectively: Collaborates internally, navigates politics, and builds trust and partnership with their colleagues.

3.

Builds & Manages their Team: Builds leverage and their team’s capacity to support all aspects of their work. Delegates and manages effectively. Creates high levels of engagement.

4.

Supports Founders and Holds them Accountable: Stays connected, acts as a thought partner, and coaches Founders effectively. Holds Founders accountable–offering resources and helping them learn from mistakes in a supportive way.

5.

Catalyzes Supportive Boards: Helps founders navigate board dynamics, make board meetings useful, and clarify next steps to up-level the executive team and the company.

6.

Manages their Personal Well-being: Manages their life, personal needs, and routines to stay healthy, be productive, and avoid burn-out.

7.

  1. Sources and Wins Deals

    2.
    1. Drives high-quality deal flow through relationships with founders, investment partners, etc.
    2. Builds a personal brand and firm credibility and thought leadership, conferences, PR, etc.
    3. Moves quickly to win deals. Builds rapport and trust with founders.
    4. Closes deals. Founders choose them and the firm.
    5. CEOs want them on their board. Has a reputation for being founder-friendly and valuable as an investor/board member.

  2. Exercises Investment Discipline & Produces Results

    3.
    1. Is clear on the investment thesis, go-to-market strategy, areas of specialization (spikes), portfolio construction, annual deployment goals, check sizes, etc.
    2. Organizes their time and their team around the investment thesis and clear goals.
    3. When appropriate, builds relationships with limited partners and drives fund investments.
    4. Collects data and performs thorough due diligence. Valuations are justified.
    5. Builds internal stakeholder alignment, advocates for deals effectively, and motivates partners to support their deals. Does not spend political capital unintentionally.
    6. Makes good investment decisions. Takes appropriate risks even if all the information is not available. Passes on deals quickly when appropriate.
    7. Drives showcase investments and has good cash-on-cash returns.
    8. Manages internal expectations and surprises around slow-growth or companies in difficulty. Avoids surprising colleagues with bad news, unidentified risks, or unknown issues.
    9. Makes good follow-on investment decisions.

  3. Supports their Colleagues/GPs, Leverages Knowledge, and Debates Effectively

    4.
    1. Develops relationships internally for thought-partnership, navigating difficult situations, and investment decisions.
    2. Is clear how decisions are made in the firm and navigates the politics successfully.
    3. Includes the right people in decision-making. Ensures GPs and other people who believe their opinion and expertise should be heard are consulted.
    4. Embraces creative conflict. Does not shy away from passionate debate.
    5. Understands other’s concerns and addresses them productively without shutting them down. Open-minded and does not get defensive.
    6. Follows up when a decision is made that is inconsistent with other’s opinions.
    7. Shares their opinions and concerns, even if unpopular or lacking certainty. Speaks up one-on-one and in internal meetings.
    8. Owns their opinions as opinions. Does not position their opinions as facts to prove their point.
    9. Takes up an appropriate amount of time in meetings.
    10. Communicates clearly and concisely.
    11. Follows through on internal projects and responds to colleagues in an effective and timely manner.
    12. Contributes to the success of the firm and its brand. Proactively identifies and executes on internal initiatives.
    13. Supports other’s decisions. Even if they would have made a different decision, they “disagree and commit” and support the decisions of others.
    14. Does not talk negatively behind people’s backs (no triangulation). When they have an issue, they speak directly to the person.
    15. Approachable and open to critical feedback on their ideas, decisions and leadership style. Willing to learn from mistakes.

  4. Builds & Manages their Team

    5.
    1. Establishes clear priorities so their team members know what to work on.
    2. Leads effective internal meetings. Clarifies the objectives and avoids unnecessary rabbit holes.
    3. Listens with openness & curiosity to other’s opinions. Willing to be influenced.
    4. Ensures commitments are clear, realistic, and agreed upon (who is doing what by when).
    5. Does what they say they will do. Follows up.
    6. Allows people to fulfill their roles and make decisions without micromanaging them.
    7. Tracks progress on commitments and ensures completion.
    8. Holds people accountable. When commitments are missed, discusses what went wrong and gets a new commitment.
    9. Builds their internal team and capacity. Ensures the right people are in the right roles, moving or letting people go when it’s the wrong fit.
    10. Renegotiates priorities with others when things change. Does not pile on new objectives without reprioritizing old ones.
    11. When tasks are completed, gives honest and helpful feedback (both positive and negative). Shares their perspective when they are dissatisfied with people’s work.
    12. Offers frequent and genuine appreciation for people’s contributions.
    13. Leverages talent across the firm and supports their team members. Leads effective 1-on-1’s internally with their directs.
    14. Addresses challenging issues promptly. Names the elephant in the room.
    15. Coaches, challenges and supports people to develop their skills and careers. Motivates people to stay.
    16. Hires effectively and lets go of low-performing individuals.

  5. Supports Founders and Holds them Accountable

    1. Stays connected with founders, the company, and the metrics. Is aware of risks in advance and is not surprised by bad news or company results.
    2. Ensures the CEO is getting the support they need to succeed. Founders see them as effective thought partners.
    3. Is available for Founders and responds in a timely manner.
    4. Ensures co-founders are working effectively together.
    5. Motivates founders to share risks, discuss issues, and strive for outcomes.
    6. Coaches founders effectively.
    7. Holds founders accountable for company results. Gives both positive and negative feedback and is transparent.
    8. When founders are failing, offers support and resources (instead of beating them up).
    9. Debriefs issues. Assumes positive intent and helps founders learn from mistakes.

  6. Catalyzes Supportive Boards

    7.
    1. Helps founders navigate board dynamics, personalities and make board meetings useful to the founder and team.
    2. Comes prepared and asks helpful questions.
    3. Facilitates healthy debates.
    4. Draws the quieter people (rather than just allowing bigger egos to dominate).
    5. Brainstorms with others to generate creative solutions.
    6. Has sufficient understanding of board and executive opinions before advocating for a specific solution.
    7. Establishes clear next steps in every meeting.
    8. Clarifies the goals of the executive team and ensures they are really bought in.
    9. Up-levels the executive team by providing their assessment, direct feedback, and resources to ensure the right people and resources are at the company for it to succeed.

  7. Manages their Personal Well-being

    8.
    1. Does not burn themselves or their team out.
    2. Is responsive and available for urgent situations without negatively impacting one’s home life. Not married to their phone.
    3. Makes time to enjoy their friends, hobbies, and their life.
    4. Spends money in a way that is consistent with their values, current lifestyle demands, etc.
    5. Has good routines for healthy eating, exercise, and sleep.
    6. Keeps wins and losses in perspective.
    7. Has down time.

Investor Capability Behaviors