Inuka Capital is a $10M pre-seed fund run by ex-founders — we are a three-person team that backs Indian startups solving important problems with technology.

This post is designed to give you a peek into how we operate behind the scenes, specifically on how we evaluate new investment opportunities:

• For founders: Get an inside look at our decision-making process and what drives our investment choices.
• For fellow (micro) VCs: See exactly how we work - the tools we rely on, how we use, and how AI accelerates our workflow and ensures we never drop the ball with founders. Many fund managers who’ve seen our setup consider it best-in-class, so I hope this offers valuable insights.

Our approach to evaluating companies that are mid-funnel and working with portfolio companies is distinct, though we use some of the same tools.

Why Screening Matters (and how we do it)

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TL;DR: We use fast, signal-driven filters to avoid costly false negatives and decide in minutes whether to take a first call.

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Before I get into our operating stack and tools we use, it’s important to understand how we [and likely other VCs] make decisions. VCs reading can skip past this section!

As a founder, your first goal, is to get an investors attention. You need to make it past “screening”.

At pre-seed, almost every newly incorporated startup is technically in our funnel, so we have to filter fast. Obviously, this is impractical.

Our job is to find the outlier — the needle in the haystack. And to find those needles, we rely on patterns - some external (signal), and some internal (thesis). So we apply filters to companies we engage with (outbound) or choose to meet with (inbound).

We are a relatively young and small fund, with not a very large brand - and despite that receive a lot of referrals and email every day. It’s hard to spend too much time on every inbound we receive or every company we hear about. At pre-seed, this is particularly hard, because it’s not like we have any real numbers we can use to filter out / in companies - e.g. “we want to talk to companies that are doing > ₹ X in revenue”, etc.

So the way we think about it is that every company needs to go through a quick screening process. The goal of this process is to minimize false negatives — because the most expensive mistakes in venture are errors of omission. e.g. “unicorn company X wrote to me at pre-seed but I didn’t even bother meeting them”. This is a lot worse than “I invested in a company that ended up shutting down”.

For you, the founder, your goal is to get at least one person on our team to want to do a first meeting with you.

Screening is a process of filtration, not of selection. There’s literally just one, binary decision that gets made at this point - “should I meet this founder and learn more”.

Because the volume is high, we take shortcuts to make this binary decision. We look at signals to figure out whether it makes sense to meet. These include things like:

• How we come across you:

  • A scaled founder who you worked with. We have seen some of our best new founders referred from a scaled founder we respect.
  • An intro from another founder in our portfolio - probably the highest signal. Since they understand our lens and what we look for.
  • From another investor who has already committed to you in the same round - another high signal, unless we don’t respect their judgment :)
  • A well-written cold email

  Don’t overthink this — these are not the only channels but what has worked for us in the past two years.

• Can this business be venture scale: This is a whole other article, but venture is about creating large outcomes in relatively short periods of time (7-10 years). You’re literally borrowing money from the future to finance growth today.

• Founder background:

  • Do you have experience with the problem statement?
  • Have you been around and worked with other high growth founders?
  • Is the quality of what you’ve done high?
  • Have you taken any risks in life?