Precursor’s Charles Hudson believes founders should test their investors

Charles Hudson, managing partner of Precursor Ventures, told an audience at AfroTech the basics of knowing when to invest: A company should have product-market fit and some form of traction.

But the next thing he said garnered some surprised looks from the audience: Founders should test investors with a small issue to see how they react to problems. ”I’m on a board with someone who tends to blow up every time the founder brings them a problem,” he said. “As you can imagine, the founder has basically stopped bringing problems to them.”

And that, in itself, can be a problem — both in investing and in life. When someone feels they can’t trust you with little problems, odds are they will not trust you with big problems, either. Hudson said these little tests can help weed out the constructive problem solvers, and help to establish trust early on. “There are people you would tell your deepest, darkest, secrets, and there are people that you would bring ordinary problems to.”

Hudson has a lot of experience in establishing trust with founders. His firm has invested in more than 400 companies, including the social networking apps why?! and Diem, as well as the diaper company Kudos. The firm has $250 million in assets under management, sitting on around $89 million in dry powder, according to PitchBook.

He shared with the high-level executives in the audience what he looks for in a pitch deck (a balance of storytelling and data