You’ve gotten some backing from family and friends and you feel you are ready to take the next step with your startup. How do you know your startup will be accepted at an accelerator? Vikram Upadhyaya, Chief Mentor and Accelerator Evangelist at GHV Accelerator spoke to GrowthKungFu co-founders Wai Hoi Tsang and Pritish Sanyal about his accelerator’s investment strategy.

Let's talk a bit about your investment strategy. TEST and Proof of Concept, what does that exactly mean and what makes a good company for GHV portfolio.

Excellent Team - the T - Execution capability of the team - the E - and building a Scalable business model using Technology - the S and T. This was TEST, the investment thesis of our accelerator. These experiences really helped and are still helping us to learn every day, and most importantly unlearning a lot of things every day.

I'll take a step back and talk you through the full form of GHV accelerator. It stands for Green House Ventures, it's a concept based on a green house, where we provide greenhouse effects to the ventures, by providing the right resources and irrelevant are removed from the ecosystem.

What are those resources? Those resources for the early stage startups, the seed stage, immediately after the family and friends round, we call it a post-incubation. They need the right set of skill in terms of building a product, which we expect the entrepreneurs to come with.

At the early stage, what we can look at, is the capability of the team. The capability of the team to build a product using their skills, instead of hiring very expensive resources e.g. they can code or build a business model and test it.

That's how we look at it. Now, this team is not relevant for a venture if they don't have an execution capability relevant to the business. So let's say there's a guy who worked for fifteen odd years in healthcare as a data scientist. Now he's thinking, let me launch a venture in the hyperlocal space, so there's piece which he brings on board that can help him to execute the venture. We look at the execution capability of the venture through the team. That's the E part of it.

Now, in a very competitive environment, one has to be scalable, highly scalable in a country like India where we all talk about a population of 1.2 billion with a big geography, a large number of smartphones and consumer base. This scalabilty in a country in India for a startup can only be achieved through technology, hence this S and T come in. We use this TEST as terminology for the investment thesis.

We are coming in with a position post-incubation, we prefer they have some Proof of Concept in place. Someone has made a product and say they can make it big, we look for a proof of concept in terms of the customer acquisition and repeat customer orders. We try to judge the engagement experience of the customer and what the loyalty factor is of the customer he is bringing in.

In a nutshell, that's how we define TEST PoC. That's our investment thesis.

Those who don't recognize themselves in that formula. If those startups that are pitching themselves to you to be incubated and they don't fall in these criteria, would you still consider them? If you do, how do you go about it.

Those that don't fit in these criteria, either they're eligible for pre-incubation stage, where we'll introduce them to some incubators and achieve these parameters. Those that are all grown, they go in the category of institutional investment post-accelerator, because they don't need acceleration, they need capital. We connect them with VCs in the market.

Is this a science-based approach on e.g. 3 out of 5 criteria or is it more of an art form where you have a deliberation with the rest of the team and you try to decide whether there's a match and potentially a long term opportunity. How do you go about that?

TEST PoC is a framework. Definitely for each parameter we have various weightage and various subcategories. In a team we look at around six points one has to achieve. We look for them to pass and achieve all the parameters to a certain level.

We give weightage based on the business model or the space they are trying to venture in. We can't have a total miss on for example PoC and still pass them and pick them up. They have to adhere to TEST PoC in full, but it may be like 80 percent for Team but 60 percent for the technology part of it. We have complete metrics which is driven by the excel. A score card we can call it.

For more about GHV Accelerator, check their website and Twitter account.

Interested in Vikram? You can find follow him for more insights on Twitter