The Cheat Sheet coefficient

The Cheat Sheet coefficient is a simplistic way of assessing the experience as founders and operators for the partners in a venture firm.

  • Ratio = Founder / Operator / Partner
  • Coefficient = (# of Founders + # of Operators) / # of Partners

This helps with a better evaluation of how experienced are investors as entrepreneurs and operators. A higher than 1 coefficient shows a solid prior experience as founders and operators for an investment company.

byFounders - 2/1/2 | 1.5
EQT Ventures - 8/12/14 | 1.42
 Maki VC - 0/2/2 | 1.0
Inventure - 1/3/5 | 0.8
Northzone - 4/2/8 | 0.75
Creandum - 1/4/7 | 0.71


Methodology

The coefficient is calculated based on each partners's work experience, as a founder of a company and as part of the operations of a company. His investor experience is implicit since he already is a partner.

Each of the three is then added for all the partners of the company resulting in a founder/operator/investor ratio. The coefficient is calculated as a percentage of the sum experience as a founder + as operator and investor.

The data is collected from the company's website listing the partners in the firm and the work titles as shown in the Linkedin profiles of the partners.
 

Example:

Assuming a company has 2 partners:

Partner 1: founder (company A), operator (company B, company C), investor (implicit since it is working for the firm)
Partner 2: founder (company X, company Y), operator (company Z), investor (implicit since it is working for the firm)

The founder/operator/investor ratio is 2/2/2 and the coefficient is (2+2)/2= 2.