Introducing the Blog — Understanding VCs And the Weird Things We Say and Do
I figure it makes sense to dedicate the first blog post to a bit of an explanation. There’s so much content on the web — from written to podcast — why waste my time starting a blog of my own?
I speak with entrepreneurs every day and find that despite all of this content, there is still a major information asymmetry between entrepreneurs and VCs. We know exactly what we’re looking for, but entrepreneurs have no clue. VCs set up traps that entrepreneurs fall into, providing a “perfect reason to pass on a deal.” Great entrepreneurs starting great businesses fail to get the capital they need to create a winner simply because of a lack of knowledge of how to frame that business in terms that VCs understand. Entrepreneurs make mistakes that either cause the business to collapse before raising funding, or that make the business unattractive to the venture community.
When I started my company, Brad Feld’s Venture Deals was the first book I read. It was fantastic at breaking down many of the written components of termsheets and venture that I would encounter. But so much of raising money isn’t in a termsheet — it’s unwritten rules, criteria for “fundable businesses” and words like “venture backable.” I decided to draw inspiration from Brad and dedicate some of my time to educating entrepreneurs about how VCs think, what we mean when we say things, and most importantly, what we don’t say.
While some of the best VCs will be far more straightforward to deal with (this is something we aspire to every day — being founder friendly, honest and speaking the truth), most VCs still do things like saying a deal is “too early” as a proxy for any deal they don’t feel like doing, even when they’ve done earlier stage deals, and asking companies to “come back when they’ve found a lead,” rather than just saying no.
Hopefully this blog will help entrepreneurs more efficiently wade through the jungles of raising money and short circuit the hard lessons I learned first through over 200+ fundraising conversations as an entrepreneur, and now as a VC and coinvestor with top funds across the country.
Fundraising is hard. But understanding how to build a business that is “venture backable” shouldn’t be.