A few weeks ago, Forbes released their annual Midas List of Top Tech Investors, recognizing those investors who have backed unicorns and seen strong returns for their funds. For these investors, their success is partly due to the fact that they are good pickers and can see opportunities like Uber and Airbnb. But there’s more to it than that. Great investors are at the right place at the right time by being thought leaders and generally solid and helpful individuals.

This idea is a strong inspiration for me, as Boris and I are continually striving to be better investors and people.

Over a year ago, we started sending a post-pitch survey to founders to get their anonymous feedback on how we can be better investors. We send this survey to any founder we’ve interacted with – not just those we end up investing in. As a small firm, we only make six to eight investments a year, meaning we have to pass on many opportunities – but we still respect these founders and try to help in other ways where we can.

The core question in the survey is How likely is it that you would recommend Version One to a friend or colleague? If you’re an entrepreneur, you’re more than familiar with this kind of question and the Net Promoter Score (NPS). Just as companies do with their customers, it is imperative that we understand what our NPS is with our customers: founders.

When we breakdown our NPS by information we get from other survey questions, it is no surprise that it is better when 1) we are quicker in our decision-making process; 2) we clearly communicate our thesis; and 3) we provide helpful feedback.

We’re going to shed some light on these three aspects of the survey and share what we’ve learned about ourselves as entrepreneurs, as well as some best practices and areas where we continue to improve.

1)    How did you find the efficiency of our process? How responsive were we?

Our average turnaround time to get back to an entrepreneur is 2-3 days. It’s about a week if we dig deeper into an opportunity. We’re lucky that we have a small partnership that allows for fast decision making. And while we can’t always be as quick as we’d like, we always do get back to a founder. We know that a founder’s time is more precious than our own.

Not surprisingly, we’ve learned that what contributes to a higher NPS is if we both spend time with an entrepreneur – probably because s/he finds that we are able to be more thorough in due diligence. However, given our schedules and size of the firm, this is not always practical. So at the very least, we try our best to hear/see every pitch from a fresh lens. We once got feedback that we had too many preconceived notions and never gave a founder a fair chance – we took that feedback to heart!

Internally, we discuss every deal that we see and make sure that we talk about both sides of the decision: why the company is not a fit for us, as well as what we like about it and what the possibilities could be if it were a fit.  

2)    Were we clear in our communication about our investment thesis?

There is a lot of debate among VCs about whether it is important to have an investment thesis. On one hand, some believe that being thesis-driven can make one less opportunistic and there’s a greater chance of missing something new.  On the flip side, having a thesis on the fund level provides a north star to align to. We’ve found that an investment thesis helps us focus our time. More critically, it enables us to effectively communicate our beliefs and who we are to our LPs and entrepreneurs.

Based on our survey data, the strongest contributor to positive NPS is our ability to  communicate our thesis: we like to invest in businesses with potentially large network effects built around people and/or data.

3)    Did we provide helpful feedback on your business?

Survey results show that our NPS is highest when we provide good feedback. This is arguably the hardest thing to do because it sucks to say “no” and we can’t say “yes” to everything. As investors, it’s also hard to have an expert opinion or strong conviction, having spent far less time on a category or space than the founder who has most likely dedicated years of his/her life to the matter.

One great tip that an entrepreneur gave us is that VCs should give feedback in three parts: 1) what we like about the opportunity; 2) what we don’t necessarily believe in about the deal and 3) what we’re not sure about (and will do more research on).

VC is a long-term game but there are certainly ways in which we can improve ourselves in the short-term. There are also so many other facets to being a great VC than the initial founder interactions. For instance, in those cases where we have the privilege of joining your journey, we strive to be the first people you come to. But for now, I decided to start with the top of the funnel because none of the above is tied to an investor’s experience, but to his/her operating and investment philosophy.