Venture Capital Aptitude test
Guy Kawasaki suggests taking the VCAT before you join a VC firm. Many feel that the tests demonstrate why entrepreneurs don’t appreciate VC involvement. I followed a discussion on Venturewoods on the topic of VC involvement to Guy’s blog. Mercury News is also running an article on how VC’s are shell-shocked by reality when they switch back to running a startup.
Guy’s VCAT is great from my point of view since it explains clearly what a startup founder needs to be good at in order to operate a company.
How do I stack up?
- Engineering background: 1 point.
- Been kicked in the groin by a long-lasting economic downturn, so that you know how powerless you are: 1 point.
- Worked at a failed startup, so that you understand three things: first, how hard it is to acheive success; second, that the world does not owe you a thing; and third, what it is like to be fired or laid-off: 3 points.
- Worked at a public company, so that you know what the end-goal looks like, warts and all: 1 point.
- Been an angel investor with your own money, so that you understand the fiduciary responsibility of investing other people’s money: 2 points;
Total so far=8 points. This is the tough part which can’t be answered at this time. These questions are geared towards operating a startup and Guy asserts that most VC’s will fail here. From the blog:
# How do I introduce a product with no budget? (add 2 points)
# How do I determine whether there’s really a market demand for my product? (add 1 point)
# What do I do if customers hate our first product? (add 1 point)
# How do I get Walt Mossberg to return my call? (add 2 points)
# How do I get to the folks who run Demo? (add 1 point)
# How do I get a plug in TechCrunch? (add 1 point)
# How do I get the folks at Fox Interactive to return my call? (add 1 point)
# How do I dominate a segment when there are five other companies doing essentially the same thing? (add 2 points)
# How much time, energy, and money should I spend on patent protection? (add 1 point)
# We bet on the wrong architecture for our product; what do I do now? (add 2 points)
# What kind of people should I hire: young, old, unproven, proven, cheap, expensive, local, remote? (add 1 point)
# How do I get them to leave their current jobs without throwing a lot of money at them? (add 2 points)
# How do I tell my best friend that he can’t be chief technical officer just because he was a cofounder? (add 2 points)
# How do I get to the buyer at BestBuy to return my call? (add 1 point)
# How do I handle a customer who wants to send back his purchase for a full refund? (add 1 point)
# How do I fire people? (add 2 points)
# How do I lay people off? (add 2 points)