The Warren Buffett Three-Part Test
Screen every founding team on high energy, high intelligence and high integrity.
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 88%
Borrowed from Warren Buffett and applied to startup founding teams, the test says you want three things in anyone you work with: high energy, high intelligence and high integrity. Energy is the entry ticket, because a winner-take-all technology startup competes against the best in the world and demands everything from the core team. Intelligence is not only broad strategic judgment but moment-to-moment decision quality — high-intellect people simply make more correct small decisions, which is why you should set the bar at your own level and refuse to invest downwards. Integrity is the one that takes years to verify and is catastrophic to miss, because energy plus intelligence without it produces a smart, hardworking crook. The practical substitute for a working history is observed behaviour: how they treat co-founders, employees and other investors today, and whether any self-dealing is already visible.
Origin
Naval Ravikant credits the three-part test to Warren Buffett and applies it to early-stage founding teams in the angel-investing series recorded for Spearhead.
Core principles
- 01All three traits are required; two out of three produces a predictable failure mode.
- 02High energy is non-negotiable because startups compete at world-class level.
- 03Intelligence is not just broad judgment — it is moment-to-moment decision quality.
- 04Integrity is the hardest to assess and the most expensive to get wrong.
- 05Niceness is a cheap signal that is easily faked and is not a substitute for integrity.
How to run it
- 1
Test for high energy first
Establish that the core team will genuinely work at the level the sport demands. Startups are the Olympics of business — you are competing against the best in the world, and the prize structure is brutally top-heavy.
Pro tip Look for evidence in what they have already shipped and at what pace, not in what they say about their work ethic.
Watch out Avoid virtue signallers and status seekers who market balance while claiming they will win a winner-take-all market.
- 2
Set a high intelligence bar and be a snob about it
Do not invest in people you do not think are in your intellectual caliber. If you invest down, you end up talking down and thinking down, and you pick the wrong people.
Pro tip Judge intelligence on the quality of their small in-conversation decisions, not on credentials.
- 3
Assess integrity through observable treatment of others
You will almost never have worked with a founder before, so substitute present-tense evidence: how they treat co-founders, employees, and other prospective investors, and how they talk about them.
Pro tip Someone who is already self-dealing at small stakes is going to cross you at large ones.
Watch out Integrity only reveals itself when stakes are high; low-stakes behaviour tells you much less than it appears to.
- 4
Strip niceness out of the score
Niceness is often just politeness or small, consequence-free signals of integrity. It is everywhere, so it filters nothing. Plenty of successful people in this business are not nice.
Pro tip Keep niceness as a personal preference input — it makes the working relationship more enjoyable — but never as a proxy for integrity.
- 5
Fail the deal if any of the three is missing
The three traits are a conjunction, not a scorecard to average. Missing energy means the team loses the race; missing intelligence means bad micro-decisions; missing integrity means you get cheated in a business with countless ways to cheat you.
Pro tip Say the specific failing trait out loud when you pass — it sharpens your own pattern library over time.
In the wild
Naval's stated failure case for dropping the integrity leg is a founder with high energy and high intelligence but no internal moral code. In a business with as many ways to get cheated as early-stage investing, that combination is not a mediocre outcome — it is an actively dangerous one, because the same energy and intelligence that would have built the company are turned on you. Since integrity takes a long time to verify and you rarely have prior working history, the only available evidence is how the founder treats the people around them right now.
→ The investor passes on a superficially impressive team and avoids a loss that diligence on the business would never have surfaced.
A founder presents extremely well: warm, responsive, agreeable with every investor question. Under this framework that tells you almost nothing, because niceness is everywhere and easily faked. Applying the test properly, the investor instead looks at how the founder splits equity with co-founders, how they describe employees who have left, and whether they have already taken a small self-dealing shortcut. When one of those checks fails, the deal fails, regardless of how pleasant the meetings were.
→ The screen catches a signal the meeting itself was designed to hide.
Common mistakes
Scoring niceness as integrity
Politeness is a low-cost signal emitted when nothing is at stake. Integrity is an internal moral code that holds when the stakes are high, and only high-stakes evidence distinguishes them.
Investing below your own intelligence bar
Backing people you do not consider your intellectual equal leads to investing down, talking down and thinking down — a reliable route to the wrong portfolio.
Excusing early self-dealing as pragmatism
Small self-dealing observed before you invest is the cheapest integrity data you will ever get. Someone already doing it will eventually do it to you.
Is it for you?
Best for
Angel investors, founders hiring a core team, and anyone choosing long-term business partners under time pressure.
Not ideal for
Situations where you already have years of direct working history — there, observed behaviour beats any three-trait proxy.
From the transcript
“I use the Warren Buffett three-part test of who you want to work with. High energy, high intelligence, and high integrity.”
“Integrity gets tested when the stakes are high.”
“Niceness is everywhere. It's not enough of a filter.”
From the episode
How to Angel Invest, Part 2