What seed investors judge before a startup has traction

The Consumer VC work group on how they judge founders, ideas and early numbers when there is little data.

Updated October 13, 2026

With little data, the group judges the founders' insight and resilience, whether the idea would spread between friends, and whether a few users keep coming back.

Insight first, then resilience. Alfred Lin weighs a founder's insight before their conviction. Sequoia backed NVIDIA before there was a GPU category because someone who had watched Jensen solve hard problems vouched for him, and passed on DoorDash after underweighting the founders' resilience.
The founder lives the problem. Niko Bonatsos looks for founders who are customers of their own product, like Saturn's, who found it easier to schedule a call with colleagues than dinner with friends. He also asks what new technology makes the idea possible now.
The idea passes a social test. Josh Elman asks whether someone explaining the idea to a friend would make both of them want to use it. He weighs a team that is hungry to iterate more heavily; Discord and Musical.ly both started as different products.
Small, real numbers and room to grow. Niko would rather see a few users who return on their own than a big download count; he has seen 5 million downloads where only 10% used the app. Kirsten Green wants a model that can scale, and Nabeel Hyatt asks whether the market can grow rather than how big the TAM slide is today.

Group chat with Kirsten, Alfred, Nabeel, Niko, Josh — the Consumer VC work group

Question:

What do investors look for in a startup before it has much traction?

Kirsten GreenFounder and Managing Partner of Forerunner. Board member at Glossier

Before there's real traction, I'm underwriting the founder's mental runway. Strategy and market analysis come second to whether this person has the conviction to will the vision into existence when it gets hard. A history of beating the odds is one of the strongest signals I know, because that person already believes hard things can be overcome.

In the room, that shows up in a few concrete ways:

• Clarity over polish. The best founders can state the problem they're solving in one compelling sentence.

• Obsession with the problem. They want to talk about it more than they want to pitch.

• Bias toward action. They started building before anyone gave permission or a perfect plan existed.

• Productive tension between co-founders who push each other and still share one vision.

Then there's the ability to get people excited. Early on, a founder's main job is to attract and activate resources: talent, capital, partners. I'll also notice whether our conversation flows like a real exchange of ideas, and whether they hold a strong vision while staying curious enough to take in new input as the market shifts.

On the business side, I want to see a model that can scale. We get pitched lots of beautiful products I'd happily buy, yet many don't fit a venture profile because the model is just selling product. Glossier is a tech company in my view because of how it builds its relationship with customers.

entrepreneur For technical products, I ask founders to separate what's validated from what's still a hypothesis, and to define the specific "moment of value" for the user.

The last test is whether this business needs to exist in the world, and whether I'd be proud to have backed this founder even if it doesn't work out.

Josh ElmanPartner at Andreessen Horowitz. Founded the growth team at Twitter

I agree with Kirsten on the founder, and I'd put just as much weight on whether the idea passes a simple social test. A friend once asked me how I think about consumer investing pre-launch, sometimes before there's even a product, and this is what I told him:

The idea should feel like it "should" work at scale. If someone explains it to a friend, both of them would feel like they "should" use it.
The founders seem smart enough, they know what's going on in the broad area, and they are so, so hungry to iterate and make something great.Medium

I weigh the second one more heavily, because with few or no anecdotes, data, or user feedback, it's really hard to predict which mix of brand and features will make people love something.

My own portfolio is a good example of why the team matters so much. Discord started as Fates Forever, a game. Musical.ly started as Cicada, an education app. Nextdoor came out of Fanbase, which was for sports fans, and Twitter came out of Odeo, a podcasting company. In each case a strong team built a solid product that didn't catch on. They kept going, and when they hit the right thing they could sense the difference right away: users engaged, communities formed, and retention held.

So I'm betting on the team that will find the thing, even if the current product isn't it yet.

If you do have a little early data, I'd much rather see a small group of users who come back on their own and do the core action than a big number of signups or a long waitlist.

Nabeel HyattEIR and former General Partner at Spark Capital. Board observer at Discord

For me it starts with the product itself. My track record on pure pre-product bets is honestly mixed, so I prefer to show up once something exists, even if nobody is using it yet. The most reliable filter I have is whether the product already feels magically better than the alternatives. Discord had a few thousand users when we led a round a few months after launch. We led Cruise's Series A a few weeks after their first private demo of a fully autonomous drive. Neither had traction in any spreadsheet sense, but you could feel the product.

Then founder judgment, because at pre-seed that's nearly all the data there is. The idea will probably change several times in year one. So I want to see a team that's moving through that fog on purpose, that can say what they'd do no matter what investors think, and that can explain what they won't do. A founder who gets murky about how they make decisions is a red flag. So is a polished "everything went according to plan" story; I trust founders more when they can name their mistakes and pivots.

Also.. don't confuse charisma with momentum. A few arranged calls and a busy calendar aren't data. I try not to write the check while I'm still drunk on the pitch. I get sober first, and sometimes that means putting the product in front of our own portfolio companies to see whether anyone actually uses it.

Market size barely enters into it. Almost every big Spark exit has been a market-expansion story, so the question I ask is whether the market can grow, not how big the TAM slide is today.

YouTube

Question:

Kirsten says that before traction she underwrites the founder's conviction first and puts strategy and market analysis second. How do you weigh a founder's conviction against the quality of their insight into the market when there is little data? Please give an example of a seed decision where one of those two clearly outweighed the other.

Alfred LinPartner at Sequoia Capital. Former Chairman and COO of Zappos

I weigh insight first, then test whether the founder's conviction will hold up. Conviction without insight is stubbornness. An outlier founder can credibly connect what is true today to a future most people can't see yet, and that is what I mean by founder-market fit. Every VC wants a great team, a large market, a specific product and a differentiated business model. Screen only on that checklist and you either find nothing or you find something close to perfect and overpay for it.

Medium

Sequoia's history has a clear case on each side.

NVIDIA is the case where the person outweighed the market analysis. When Jensen pitched Don Valentine, he had no "GPU" category. He couldn't describe his customers or his market size, and his plan to build for video game companies was one Don dismissed, because startups can't depend on other startups. Don invested $1M anyway. His conviction came from Wilf Corrigan at LSI Logic, who had watched Jensen solve hard problems for years.

outlierspath

DoorDash is the case where we got it wrong. In September 2013 the founders had $20,000 in the bank. A Stanford football game produced 100+ orders at once, and food arrived 90 minutes late. They spent about $14,000 on refunds, then stayed up until 5 a.m. baking cookies and delivering them to every customer. They raised their seed round only after dozens of rejections, and Sequoia was among those who mistakenly passed.

Medium The insight was there, because Tony grew up around small businesses. We underweighted the resilience.

At seed, I test the insight in the pitch and the conviction through what the founders do when things break. Sequoia's postmortems on our biggest misses always trace back to a psychological bias. None of them trace back to an error in calculation.

YouTube

Niko BonatsosFounder of Verdict Capital. Former Managing Director at General Catalyst

First, I look for a founder who is the customer of their own product. Before there's real traction, the founder's personal connection to the problem is the strongest signal available. When I met Saturn's founders in May 2019, Dylan and Max were Wharton sophomores, barely a year out of high school, and one of them skipped an exam to take the meeting with us at General Catalyst. They had noticed it was easier to schedule a conference call with colleagues than dinner with friends, and no calendar was built for their generation. That firsthand familiarity with the problem and the audience reminded me of Evan and Bobby at Snap.

Medium On Alfred's split between conviction and insight, a founder who lives the problem every day usually has both, and you can check the insight quickly by watching how they use their own product.

Second, Josh is right about a small group of users who return on their own. Saturn's proof of concept already had engagement and retention I hadn't seen since Discord and Sleeper, and that intensity was the data point, with the user count still tiny. Big download numbers are usually vanity metrics: I've seen 5 million downloads where only 10% actually used the app.

Medium

Third, I run the idea through a short list of questions

Medium:

What new technology makes it possible now? The front-facing camera made Snapchat possible, and GPS made Waze possible.
Does the product get better for each user as more people join?
Does it sound silly to most people? "Snapchat is for sexting" did. Kirsten's one-sentence clarity test matters, but the best early ideas often sound dumb in that sentence.

At this stage you don't need a famous cofounder, a warm intro, or a polished deck. You need a prototype that works. Early traction is mostly a story problem, so the best founders know which narrative gets them to the next stage.

Nabeel HyattEIR and former General Partner at Spark Capital. Board observer at Discord

I'm with Alfred on insight first, and Q.ai is my clearest example. It also breaks my own rule about waiting for a product. Aviad cold emailed in 2022, and we invested pre-product and pre-revenue in silent speech, which is exactly the kind of bet I said I'm usually bad at. What carried it was the quality of the insight: a founder with a clear, incisive view of where the technology could go who could explain it with real fluency. Conviction alone wouldn't have gotten me there. It worked, and Apple acquired the company this year for $1.6b.

The founder I worry about is the "force of nature" type. They can will a company into existence, and they're often pretty self-aware about how they work. But when there's no product to feel, I can't tell yet whether that intensity will turn into a strategy they can actually execute, so the insight has to carry the case.

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Frequently Asked Questions

What should a founder cover in a first investor meeting?
How the customer is changing, what the product does about it, and the user behavior behind any numbers. Leave time to show weak data and see how the investor responds.
Which questions trip founders up in a first investor meeting?
Why the company will matter in 10 years, why a customer changes what they do, who comes back and why, and what this round pays for. Each needs a specific example or number.
How should an early-stage pitch deck be structured?
Around one story. With a working demo, one order is the shift, the demo, the business model, evidence of behavior, how the business grows, what can't be copied, then team, risks and the raise.
How does a pre-seed round work?
Usually one lead sets the terms and angels fill in around it. Size the round from the milestones it has to reach, keep one instrument and one cap, and keep the open window short.
What makes an accelerator application stand out?
Why this team has an edge on this problem, a product the reviewer can try, numbers that hold up to a follow-up question, and a change the team shipped after watching users.
What goes in a monthly investor update?
Runway and 3 to 6 consistent metrics, wins and setbacks, people changes, next month's milestones, the biggest open risk, and two or three asks an investor can act on.

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Frequently Asked Questions

What seed investors judge before a startup has traction

Consumer VC

Frequently Asked Questions

What should a founder cover in a first investor meeting?

Which questions trip founders up in a first investor meeting?

How should an early-stage pitch deck be structured?

How does a pre-seed round work?

What makes an accelerator application stand out?

What goes in a monthly investor update?

Your ideas, super powered.

What seed investors judge before a startup has traction

Consumer VC

Frequently Asked Questions

What should a founder cover in a first investor meeting?

Which questions trip founders up in a first investor meeting?

How should an early-stage pitch deck be structured?

How does a pre-seed round work?

What makes an accelerator application stand out?

What goes in a monthly investor update?

Your ideas, super powered.