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> They look for signals before hard metrics. Honestly, a lot of times a VC will turn you down and cite metrics, but in reality it's not the reason they're not

> They look for signals before hard metrics. Honestly, a lot of times a VC will turn you down and cite metrics, but in reality it's not the reason they're not investing. It's just a much easier and less offensive thing to use as a reason for passing (definitely easier than something like "we don't think you're impressive enough to pull this off" or "your product is crappy"). So they'll say "oh your unit economics aren't attractive" to you... But other companies have raised tons of money and maybe even made it all the way to IPO without attractive unit economics.

halgir 5y ago
Is it only emotionally easier, or do they expose themselves to any sort of legal risk by saying your product sucks or they just don't like that you have bad breath?
- timcederman 5y ago
  What's the legal risk?
  - halgir 5y ago
    I'm asking to find out.
- htrp 5y ago
  There is no legal risk.... they would rather maintain a relatively cordial relationship with you or with the person who referred you to them on the off chance you do successfully pull it off (since venture is a small world relationship based industry).
xwdv 5y ago
Citing metrics is a good catch all excuse for not investing. If a product truly sucks you’ll be able to easily point to some metric or the lack of data as a reason why. Rarely will a product suck yet also have solid metrics.
- cbnotfromthere 5y ago
  LinkedIn.
b20000 5y ago
VCs like to fund people they can control regardless of competence. this leads to failure eventually.
- bsenftner 5y ago
  This is a huge factor.
redis_mlc 5y ago
I don't understand this thread, since it's not based in reality. VCs rarely (never) say, "No.", since: - there's no advantage to them in closing a door like that - they can wait and invest in a later round when there is an advantage to them (social proof, VC competition, etc.) The only time I've actually heard "No." is for a pr0n site, and that was just a blanket policy at the time. If they're talking down about metrics, then that's just evasion so they don't have to say "No." The other interesting conversation I had was at a conference where a few of us were talking in a circle in the hallway. The VC said, "I'm a startup investor, you're a startup maker." indicating in the mind of VC's there's 2 clear classes of people. He who has the gold, makes the rules.
unclebucknasty 5y ago
I noticed this back when I watched Shark Tank. Cuban in particular was wildly inconsistent in his focus on metrics, demanding much more of some companies. It was pretty clear that it was just convenient, easy to explain shorthand for not wanting to invest. But, it was plausible in isolation. It's only when you have the ability to see his process over multiple deals that the inconsistency emerges. Obviously founders wouldn't have that view in the typical VC scenario. They'd only have their own experiencen with the investor. So I think this is mostly true. But I do think in a minority of cases they're willing to ignore metrics because they think they know how to fix whatever issue is causing underpeormance and/or have resources they can apply (including synergistic portfolio companies).

halgir 5y ago

Is it only emotionally easier, or do they expose themselves to any sort of legal risk by saying your product sucks or they just don't like that you have bad breath?

timcederman 5y ago
What's the legal risk?
- halgir 5y ago
  I'm asking to find out.
htrp 5y ago
There is no legal risk.... they would rather maintain a relatively cordial relationship with you or with the person who referred you to them on the off chance you do successfully pull it off (since venture is a small world relationship based industry).

xwdv 5y ago

Citing metrics is a good catch all excuse for not investing. If a product truly sucks you’ll be able to easily point to some metric or the lack of data as a reason why. Rarely will a product suck yet also have solid metrics.

cbnotfromthere 5y ago
LinkedIn.

b20000 5y ago

VCs like to fund people they can control regardless of competence. this leads to failure eventually.

bsenftner 5y ago
This is a huge factor.

redis_mlc 5y ago

I don't understand this thread, since it's not based in reality. VCs rarely (never) say, "No.", since: - there's no advantage to them in closing a door like that - they can wait and invest in a later round when there is an advantage to them (social proof, VC competition, etc.) The only time I've actually heard "No." is for a pr0n site, and that was just a blanket policy at the time. If they're talking down about metrics, then that's just evasion so they don't have to say "No." The other interesting conversation I had was at a conference where a few of us were talking in a circle in the hallway. The VC said, "I'm a startup investor, you're a startup maker." indicating in the mind of VC's there's 2 clear classes of people. He who has the gold, makes the rules.

unclebucknasty 5y ago

I noticed this back when I watched Shark Tank. Cuban in particular was wildly inconsistent in his focus on metrics, demanding much more of some companies. It was pretty clear that it was just convenient, easy to explain shorthand for not wanting to invest. But, it was plausible in isolation. It's only when you have the ability to see his process over multiple deals that the inconsistency emerges. Obviously founders wouldn't have that view in the typical VC scenario. They'd only have their own experiencen with the investor. So I think this is mostly true. But I do think in a minority of cases they're willing to ignore metrics because they think they know how to fix whatever issue is causing underpeormance and/or have resources they can apply (including synergistic portfolio companies).