The VC Field Guide

7How = Scale

I've spent a lot of time thinking about how to align my learning to the “How,” and in my earliest days I thought this factor only referred to go‐to‐market execution, especially when we started to see the growth investors layer in KPIs that were predominantly sales‐centric. Over time, though, directing my attention to companies with 100 or more employees, I started realizing that companies scaled not because of just revenue but overall, and that includes people.

When we evaluate a team in the “Who” part of the framework, we're asking questions directly related to leadership. As investors we obviously get visibility into leadership but we don't get visibility of the team underneath the leadership, and we need some way to assess the team underneath the leadership. We need to understand the scale of the machine being built by the leadership if we want to make good decisions. So, because the “How” is all about execution, and execution is all about people, there is some overlap between the “Who”—which is the leadership team, and the “How”—which is how the overall company grows to meet market demand.

What's most important about the “How” in VC thought is that we can't do an extensive audit of an organization when evaluating a company for scale. Typically a company that has already started to scale and has validation that it can continue to scale is a more mature startup. In these scenarios, it is not uncommon for numbers to speak more clearly than any number of interviews ...