I am a mentor in Capital Factory, an accelerator in Austin. Here's how we pick the companies that we accept into our program.
It starts with an online application. We also require that our applicants record a little video so that we can get a sense of their personality and communication skills.
We get hundreds of applications each year, and a handful of the mentors sift through them to find the most promising. We have a google doc on each company where mentors add their comments based on their expertise in the industry, technology, problem domain, etc.
We invite the top 10-15 companies in for an in-person interview, about 30 minutes long. If a company can not attend in person, we do the interview via video chat on Skype. We typically do the interviews back to back, so they have to start and end on time. Our program has 20 mentors, and usually 5-8 of them are able to attend any given interview. Given our busy schedules running our own businesses, it's common for mentors to be coming and going, and very few mentors are able to attend every single interview. We videotape the interviews so that mentors who are unable to attend the interview can view it later.
We start the interview by asking some standard housekeeping questions to make sure the applicants know what will be required of them (that they live in Austin during the program, that they work on their startup full time, etc.).
Next, we ask the applicants to introduce themselves and their backgrounds, and then the applicants give us their 2 minute pitch.
After that, it becomes a conversation where we are tying to understand the business model, the opportunity, the traction, the risks, the competitors, etc. We don't have any standard questions - different mentors ask the questions that they care about until the time is up. There are no demos, no presentation decks, no hand-outs - it's just a conversation. It's a lot closer to a job interview than to an investor pitch.
The main things we are looking for in the interview are:
- How smart and capable is the team? Does the team have a clue about what they are doing? For example, if the mentors know of a competitor that you don't know about, that means you haven't done your research. Bad sign.
- What kind of traction do you have? Customers, users, etc.
- Do you know how you are going to make money, and what evidence do you have that it will work? How have you tested your theories? Just saying "we are going to sell ads" isn't going to cut it.
- How are you going to acquire customers, and what evidence do you have that it will work? Do you have existing customers or customers who have said that they will pay once the product is built? Do you have any prior sales experience? For example, we had an applicant that had talked to literally 100+ prospective customers - doing pain interviews, getting soft commitments, etc., and we had no doubt that he would be able to use the same skills to get sales meetings once the product was complete.
- Do you have the talent to pull it off? We are looking for a strong, committed team with domain experience, technical chops, marketing/sales skills, and the ability to learn quickly.
- Can we help you? We want startups that play into our strengths, so that our mentorship will be impactful. If your startup is inventing a new cancer drug, you probably aren't a fit for us, because we don't know anything about the pharmaceutical industry.
- Can you take feedback? Our program is all about mentorship, so we need to know if you can take our feedback and be convinced when you are wrong. If you are too married to your ideas, you're not a good fit for our program. Companies that go through our program tell us that the mentorship is the most valuable part of the program, so you need to be able to take the advice and act on it.
There are some things that we don't do during the interview:
- We don't ask you to write code or prove your technical chops
- We don't ask you to demo your product - there just isn't enough time
During the interview, the mentors are taking notes in the Google doc in real time so that other mentors can catch up later. It can be a little disconcerting, but we promise we aren't surfing the web.
We leave about 5 minutes at the end to answer any questions the applicants might have for us.
In some rare cases, one of the mentors will follow the applicants outside and continue the conversation while the rest of the mentors start the interview with the next applicant.