Thursday, June 09, 2011

"I Want to Meet a Partner!"

This is a "reprint" of a post I originally authored for TechCrunch.

Over the years I’ve heard many legitimate gripes from entrepreneurs about the way venture capital firms treat them while fundraising. I must confess an imperfect record of courtesy myself, though I do try to be respectful, and to incorporate feedback. For example, I once resolved never to keep entrepreneurs waiting long for me in our lobby, and I think I live up to that.

But I often hear one particular gripe from those who simply fail to think through the issue practically: For their first pitch to a large venture capital firm, entrepreneurs are often invited to speak or meet with someone other than a partner of the firm. Some interpret this as an insult, a waste of time, and a lack of substantive interest in their startups. And they are partially right.

They are right that in any first meeting or conversation, the VC is less interested than the entrepreneur. Not zero interest, but less. This is true for every pitch meeting that has ever taken place in history. In the second meeting there is more interest, and by the time a venture investor wires the money, the firm is just as excited as the founders.

They are wrong, though, about the insult. And the numbers prove incontrovertibly that it is not a waste of time.

The experienced partner you want as a lead investor probably has a lot of board seats. He or she spends most of the day at company meetings (board and otherwise), in interviews, and with the limited partners who actually provide the capital. I, for one, always try to reserve time in my week for hearing pitches, but it is scarce, and so if I took every first meeting myself, I’d be much less likely to actually meet the entrepreneur whose startup I wish to fund.

Also, as a seasoned VC I’m a lot dumber now about new markets than 15 years ago when I had fewer obligations. Researching all thewild tangents and nuances of cloud infrastructure, cyber security, social commerce, scalable data processing, etc., is a full time job. Who Has Time For This? Not I, but I can hire people smarter than me who do!

So if you’re an entrepreneur interested in partnering with a smart, successful, well capitalized venture investor, you have many aspects of character, competency and chemistry to consider. Is the audience’s seniority at your first pitch really the most important?

Think it through before you snub a meeting with that associate, analyst, principal or vice-president. That’s who’s most likely to get what you’re doing, and to be your champion through the process. (Indeed, the last five investments I made arose from first meetings that the founders had with James Cham, Trevor Oelschig or Ethan Kurzweil.) Consider it an opportunity to scope out the firm and to polish your pitch before you meet the partners.

And please understand that the intention is most definitely not an insult. Anyone in our orbit knows that many VCs fully appreciate the talent, courage, energy and genius of the entrepreneurs we meet. It is only because we wish to meet more of you that we have the process and organization that we do.

Now I’ve got to get going——the two engineers whom Sunil met on Thursday just showed up in my lobby.


  1. Kudos to you for taking on this issue.
    I trust that your nonpartners are also sensitive to the potential for misunderstanding and insult and conduct themselves accordingly.

  2. the other point I would add is that in startup mode you should always be pitching...and so talking to anyone willing to listen about the business is a good thing and should just help to refine the story and vision anyway.

  3. What an interesting read. I've only seen the other side presented much in blogs before, it's cool to get this side of it too.

    I wonder if entrepreneurs view these meetings dofferently with firms that work to make it clear that their junior members are a real art of the decision making process? I think there's a perception that most firms use junior people to do intelligence gathering rather than investment sourcing, and a suspicion that a call from a junior person may be data mining for a competing startup the vc firm is considering.

  4. It's good to see a substantial post that tackles work ethic. It's important to remember that not all VCs have the luxury of time; sometimes it's not that they're less interested. It's because they simply can't make time.