Open-source TDK Ventures Investment Scorecard

By Tina Tosukhowong and Nicolas Sauvage | TDK Ventures

(Before you read on, feel free to download the TDK Ventures Investment Scorecard using the “Download Report” button above.)

Introduction

Launched in 2019, TDK Ventures has since grown 10X from $50M to $500M in assets under management, from 4 to 40 members, and from 1 location in Silicon Valley to now include Boston, London, Bangalore, Zhuhai, Japan, and soon Munich. We are so proud of our diversity, not only in terms of gender and background, but most importantly — “diversity of thoughts.”

While we are very diverse and make investment decisions based on “conviction,” not majority, we do have our guiding principles — the Investment Scorecard — when it comes to evaluating investment opportunities. TDK Ventures’ Investment Scorecard is a concise, repeatable framework designed to help investment team members systematically assess various aspects of early-stage opportunities. It is structured and multi-dimensional to make diligence more robust, objective, and to enable consistent comparison of different investment opportunities across unrelated sectors.

As an early-stage deep-tech investor, we are not looking for “perfect” companies that score 5 out of 5 across all the scorecard dimensions. In fact, we have never had any companies that score perfectly across all metrics. All early-stage investments carry risks, and it is important to identify them up front, communicate these risks with entrepreneurs, and help them de-risk as companies scale. When we do the assessment well, we know exactly how we can help the company after our investments.

In fact, our Investment Committee has approved an investment in a company whose scorecards were only red (below 2 out of 5) and yellow (≥2 but <4), with no green (4 and above) at all, because they appreciated both the company’s early-stage nature and the risk-adjusted valuation that came with it.

Why open-source our investment scorecard?

Guided by our commitment to contribute to society, we are open-sourcing our investment scorecard to share hard-earned best practices that can help investors and founders:

• For investors: this is a practical, question-driven cheat-sheet to structure diligence and make explicit where companies stand across key dimensions. By applying the same scorecard consistently, investors can compare opportunities across very different investment and technology paths on an apples-to-apples basis (e.g., across our entire diversified portfolio of unrelated bets) and decide if the investment is justified, especially in capital-constrained environments where trade-offs matter most.While this scorecard is optimized for Corporate VCs given the explicit strategic dimension, we believe institutional VCs can readily adapt it to sharpen fund-thesis alignment, underwriting discipline, and portfolio-level comparisons.

Furthermore, when we do follow-on investments, we also compare the company’s scorecard at the follow-on stage against that of the previous round(s), and it often gives us good insight into whether the company really derisked well over time.

In practice, these comparisons over time often become one of the most effective tools for board and management alignment, helping distinguish real progress from narrative evolution.

• For founders: this is a blueprint of what top corporate & strategic investors will rigorously test. Use it to anticipate questions, tighten your narrative, and address gaps before fundraising. In a world where investors see hundreds, if not thousands, of investment opportunities each year, understanding what truly matters to building a strong foundation for the company.

This document is meant to help spread the best practices by TDK Ventures to investors under the Creative Commons “CC BY” license. Readers are encouraged to use it freely or adapt the scorecard for their future work. The author would also appreciate feedback to help us continue refining our scorecard.

Download the full TDK Ventures Investment Scorecard

TDK Ventures Investment Scorecard

At a high level, we make investments only if all three criteria are met, and we believe the company is the “King-of-the-Hill”. Our three criteria include:

1. Venture-style financial returns. Each investment should be capable of returning capital at the fund scale.
2. Strategic value to both the limited partner(s) and the portfolio companies. When it comes to strategic value, we strive for equal-win opportunities. We hope both parties can benefit equally.
3. Positive societal impact resulted from innovation. This is the minimum threshold for us to even consider evaluating the company.

The first criterion is the hardest bar to meet. When we invest in companies at a very early stage, there is no crystal ball to tell whether they will be fund returners. So we have developed our scorecard and improved it over the years to help guide ourselves and our portfolio companies toward the “fund returner” aspirations.

TDK Ventures’ investment scorecard consists of seven pillars, as shown in Figure 2. While we have updated the rubrics within each category, these were the original seven pillars of the scorecard that we used since our first investment in Starship in 2019, which speaks to the robustness of our original framework:

• Strategic Value: As a corporate VC, our scorecard explicitly articulates the strategic dimension. How well does this investment fit the fund’s strategy? How significant are those strategic values to the limited partner? These questions can also be leveraged by institutional investors to explore the alignment between the potential investment to their fund thesis, expertise, or LPs’ interests.
• Market Potential: Key questions were whether the market is big enough and has a strong growth driver to allow newcomers who move fast to penetrate and capture the market. Is their position in the value chain allowing them to capture substantial value?
• Team: Is this the team that instills confidence that they have what it takes to succeed by looking at their past track record and their current vision?
• Co-investors: Do we believe investors around the table are the force multipliers that will help set up the right governance, support the team in the long run, and guide the company to succeed?
• Technical Advantage: Do they have strong technical differentiation that will provide sustainable advantages in the long run? Can the solution be integrated into customers’ workflows with minimal changes?
• Competitive Advantage: Do they have a sustainable competitive advantage (e.g., better, cheaper, faster, or other positioning moat) that forms strong barriers to entry in the long run?
• Execution Risk: Does the company understand its key inflection points and put together a credible plan to reach the exit? Has the team shown the ability to manage execution risk and early signs of operational excellence?

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As shown in Figure 2, for each pillar, we distill 5 key metrics to gauge the company’s strength along with that pillar. It is important that each metric be orthogonal to the others, so that when the company scores one point on one metric, it does not automatically help them score another point on another element. This is very crucial here.

Each metric is intentionally scored using only three possible values: 0, 0.5, or 1, forcing clear judgment rather than false precision.

One of the rubrics that we have substantially refined recently is the Market Potential scorecard. In our previous version, we used to ask “Does the market have TAM (>>$10B), SAM, SOM large enough and strong CAGR?” By lumping the market size and the growth rate together, companies in a slow growth but big market might score the same as a company in a strong growth emerging market, which should not be the case. Therefore, in our revised scorecard, we decided to decouple the addressable market and the growth rate as two separate rubrics, so they can be evaluated independently.

Why does this matter? Let’s look at examples of how the market scorecard plays out when we compare two emerging technology sectors: green steel and co-packaged optics. In the first example, startup A is developing green steel technology for the EU market, which has regulations to drive lower-carbon steel. The global steel market already exists and is a trillion-dollar market. Customers would want the green steel product if the company can make it at cost parity, which remains to be proven. Overall, the company scores 3.5 out of 5 or “yellow” on this market potential scorecard. We do think the market has potential. If the right opportunity comes along with a strong scorecard in other dimensions, we might make an investment in the future. Importantly, a ‘yellow’ score reflects disciplined prioritization at a given point in time, not a lack of conviction in the sector itself.

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In Figure 4, startup B is developing optical interconnect co-packaged optics (CPO) for AI scale-up networking. In this case, Startup B scores 4.5 out of 5 or “green” on market potential because it is in a hyper-growth market with major chipmakers and hyperscalers announcing a technological roadmap to adopt CPOs by 2030. In this case, performance drives adoption, and speed to market is essential to secure multi-year contracts. Despite the market size for CPO being much smaller than green steel, given such a strong market disruption potential, our team prioritized and made an investment in this area.

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Advice to entrepreneurs

Now that you’ve seen an example of an investment scorecard used by a VC firm like TDK Ventures, it is important for you to do your own self-assessment to identify your strengths and gaps. Companies that recognize their risks and work to address them head-on will have a better chance of a successful outcome. If the gaps are ones the company can address by adding resources, fix them. If the gaps are market-related and the company might not be able to control them, perhaps it is time to consider a pivot.

You should also consider constructing the dataroom to show evidence that the company deserves a high score in all the pillars.

• Market: Create a one-page TAM map showing where you will realistically capture share over 3–7 years and the assumptions behind it. Bring explicit evidence of willingness to pay, such as pilot terms, pilot success metrics, or early purchase agreements.
• Team: Hire the best team you can. To build a generational company, you need a leadership team with a demonstrated track record of building and scaling high-growth companies, not just strong individual contributors.
• Technical Advantage: Prepare a concise tech roadmap with clear milestones, required engineering investment, and a credible go-to-manufacturing plan. Provide clear documentation for IP, freedom-to-operate where relevant, and any third-party validations or peer-reviewed work.
• Investors: Choose investors who bring tangible value beyond money and can credibly support follow-on rounds. Be ready to ask about the investors’ track record, reserve strategy, and how they plan to support the company.
• Execution Risks: Produce milestone-based plans to unlock value creation with KPIs, ownership, and explicit financing needs tied to each milestone. Demonstrate operational discipline: sample board materials, a living KPI dashboard, hiring plan aligned to milestones. Be very intentional in articulating the key risks, the specific derisking plan, key responsible persons, and realistic timelines. The best-performing companies are not those that hide their challenges, but those that surface them early and tackle them with a clear plan and discipline.

Advice to Investors:

You should find this scorecard straightforward and self-explanatory. What’s most important during the diligence is to verify all aspects beyond the company’s claims. For example,

• Market: Build your own TAM/SAM/SOM with sources and realistic penetration assumptions. Check for demand signals beyond founder claims. The best signals always come from customer interviews to understand the pipeline conversion likelihood and expected sales cycle length. In some conservative industries, a company can be dead by a thousand pilots, meaning the customers can just do pilot after pilot without committing to purchase. It is important to gain a precise, evidence-backed understanding of the sales cycle during the due diligence process.
• Technical Advantages: Validate that the technical claims are independently verifiable or backed by credible third-party testing. Confirm IP position and freedom-to-operate (FTO) early and try to stress-test manufacturability assumptions and run sensitivity analysis on unit economics at scale.
• Co-investors / Lead Investors: Assess the lead investor’s history in similar rounds and the alignment of incentives. Confirm both the reserve strategy and the willingness to deploy follow-on capital, and whether co-investors will actively enable the company’s next stage.
• Execution Risks: Demand a milestone-based financial plan and sensitivity analysis. Evaluate team track record for delivering against key operational milestones. Look for early indicators of good governance and communication discipline (quality of board materials, forecasting cadence, and decision-making clarity).

Closing — Why a scorecard matters

A consistent scorecard converts intuition into structured judgment: it makes comparisons more objective, reduces bias, and surfaces the real work (evidence and milestones) that separates noise from investable opportunities. For investors, it’s a tool for disciplined new investment decision-making, as well as for ongoing post-investment support. For founders, it’s a transparency tool to show you understand investor priorities and are building a credible path forward.

Always remember that the scorecard is a snapshot of a company at a given point in time. Companies should be re-evaluated periodically to ensure continued progress toward long-term success.

Used consistently, a scorecard like this turns conviction into accountable decision-making, serving as both a communication tool for teams to stress-test an investment lead’s conviction and a way to drive stronger decisions across multiple, unrelated investments.

Related Article:

Nicolas Sauvage, “How VC can create a winning investment thesis,” Harvard Business Review, April 22, 2025.

References

[1] Green Steel Market Size, Share, Growth | Forecast Report, 2032

[2] Yole Group — Follow the latest trend news in the Semiconductor Industry