This FounderDating Guest Post was written by Frank Barbieri for our series: FounderTalk – The Real Story.
Frank is a SVP of emerging platforms at YuMe and was previously Founder/CEO of Transpera, a mobile video delivery and advertising network which sold in February 2011 . He’s also an advisor to several startups and can be reached and/or followed at @frankba.
You may be lucky enough to not have to raise money for your new venture. Or lucky and successful enough to have investors already banging down your door to give you money. More likely you are, as I was, one of the 99% of entrepreneurs who are bootstrapping their way along the passionate road to launching and scaling by any means necessary. And “necessary” for you might mean raising money. If it does, you will hear this: ‘VCs are rude.’ Is that true?
Before we tackle whether it’s true or not, know that this will definitely happen to you: A meeting that you think went great is followed by soul crushing silence.
Taken at face value this is rude behavior. And there are no shortage of entrepreneurs who rail against VCs who have exhibited this behavior (http://thefunded.com/). But, whether it’s rude or not, what I’ve found helpful is to treat fundraising like dating. Try it and it will make your life far less stressful and your fundraising far more efficient.
When raising the B round for Transpera I had one very public VC get excited enough to pull me off a conference show floor and into a hastily arranged all partner meeting across town in a matter of hours. It was crazy, spontaneous, exhilarating, exciting. I was certain we had found a match. After all, I burned an entire day chasing him and his partners around town and two hours in the actual meeting, which seemed to go very well. All day we were txting, calling, pitching, riffing, flirting. It was the perfect date. Like when you meet someone at an afternoon BBQ and spend the entire day and night doing one spontaneous thing after another ending up on their doorstep at midnight looking back at an expectant gaze.
I thought it was love at first sight. Breathless, the next day, I emailed the promised follow-up. That was four years ago. He never called back. And this is one of those “I’m a former entrepreneur so I’m different” VCs. After a few weeks, I admit, I went a little psycho. I txted, “Hey…I just wanted to check if my e-mail might be getting caught in your spam filter or something.” #humiliating.
It turns out, he was just not that into me. I’ve since gone through multiple rounds of financing and gotten a lot closer to many VCs, and I empathize. The sheer volume of introductions, reviews, follow-ups and due diligence that any one VC has to support is built for breakage. Though many have tried to make the process more efficient, there are few short cuts to running due diligence on a set of people and a company you’re about to pour a seven figure check and seven years of your life into.
Is that rude? Let’s say that there are many different communication styles and not all styles are compatible. I now know, and am confortable with the fact, that lack of follow-up is a simple indication of lack of interest and I don’t take it personally.
In sharp contrast, one of my favorite VCs is a guy who I still interact with regularly. Before I even pitched him he laid out his process: “I’ll listen to your pitch today. Think about it and research the rest of this week. Talk to my partners on Monday. And tell you my decision on Tuesday next week.” And w00t, the following Tuesday he called me to say, “No.” But it was the best “no” I ever got. He even told me why he was saying no. You’ll learn in fundraising that a fast “no” is always better than a slow “maybe.”
Raising money is like dating, so don’t go psycho. If you went on a date, and that person never called you back, would you write them a nine hundred word treatise on why you would actually be a great boy/girlfriend? Would you continue to call and text them? Hopefully not, so don’t do that when a VC ignores you. You are not going to talk them into loving you, and if you have to, it’s going to be a bad relationship. It is astonishing how many entrepreneur friends I have who have written that note. Would you really want to marry someone you had to convince of your hotness?
The quirk of raising venture money is that no matter how big the market, or how great your team, you may just not be the right fit for a certain partner, firm or time. The really good partners and firms will tell you this straight up, and keep in touch for your next project. But a lot will simply not call you back. Don’t take it personally.
You could rail at VC #1 in this story, but it’s far less stressful to look at these two different styles as simply different ways of saying ‘no’ to you. Signals that you should move onto your next prospect so you can close your round and focus on the business.
I did eventually find true love. And I can tell you it made all the jilts worthwhile.