The Three Ts Investment Screen
Screen opportunities through team, addressable market, and technology fit
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 4
- Confidence
- 92%
The Three Ts Investment Screen evaluates a startup through team, total addressable market, and technology. Team comes first: Perell examines the founder and the people around them, treating a claim that the founder can do everything alone as a red flag. Next comes TAM, the total addressable market, which tests whether the opportunity is large enough to produce the investor's desired return. The final T is technology, reflecting Perell's background and investment thesis; she generally seeks technology companies while allowing selective exceptions in areas aligned with her own interests, such as health and wellness. The screen is best used to decide whether deeper diligence is worthwhile. It does not replace verification of claims, economics, terms, competition, or execution risk.
Origin
Kim Perell described the three filters she uses when considering investments, grounding them in her experience as an entrepreneur and technology investor.
Core principles
- 01People are the first investment filter
- 02A founder's surrounding team matters
- 03The market must be large enough for the desired return
- 04Sector fit should reflect the investor's thesis and knowledge
How to run it
- 1
Evaluate the team
Assess the founder's capability, character, and ability to attract strong people. Examine whether the surrounding team can execute beyond the original idea.
Pro tip Ask who fills the founder's most important skill gaps.
Watch out A founder who believes the team is unnecessary is a major red flag in this screen.
- 2
Size the TAM
Estimate the total addressable market and whether realistic penetration could create a meaningful return. Test the assumptions behind the market number.
Pro tip Pair top-down market figures with a bottom-up customer and pricing estimate.
Watch out A large industry does not mean the startup can address all of it.
- 3
Check technology fit
Determine whether the company fits the investor's technology or sector thesis and whether the investor understands the relevant risks. Treat exceptions as deliberate choices.
Pro tip Write down why this opportunity belongs in the portfolio before considering excitement or social proof.
Watch out Personal passion should not silently replace investment discipline.
- 4
Decide on deeper diligence
Use the three results to reject, pause, or advance the opportunity. If it advances, verify economics, competition, terms, and claims separately.
Pro tip Record the weakest T so deeper diligence targets the central uncertainty.
Watch out Passing a screen is not an investment decision.
In the wild
A founder presents a compelling software concept in a large market but insists that no supporting team is needed. Under the Three Ts screen, the opportunity fails the first and highest-priority filter. The investor pauses rather than allowing the attractive market story to hide execution risk.
→ The investor avoids advancing a deal whose founder rejects a critical execution requirement.
A startup has a credible founder, an experienced technical and commercial team, a bottom-up path into a large market, and technology the investor understands. It passes the screen and moves to detailed diligence on customer evidence, economics, competition, and deal terms.
→ The screen concentrates diligence time on a plausible thesis-aligned opportunity.
Common mistakes
Letting TAM hide team weakness
A huge theoretical market cannot compensate for people who are unable or unwilling to execute together.
Treating TAM as obtainable revenue
The total market must be translated into a realistic reachable share rather than repeated as a headline number.
Using the screen as full diligence
The Three Ts qualify an opportunity for further work; they do not validate valuation, terms, economics, or factual claims.
Is it for you?
Best for
It is best for early-stage investors comparing founder-led technology opportunities.
Not ideal for
It is not ideal as a complete valuation or due-diligence process for mature, asset-heavy, or non-venture businesses.
From the transcript
“I think I look at three things when I invest.”
“The second is a TAM which is a total addressable market. I want to know there's a big market opportunity for me to make a…”
“team's number one.”
From the episode
Episode 499: Kim Perell: Building a $235M Company from the Kitchen Table + Why Perfectionism Kills Success
Kim Perell