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How Not to Pitch to a Startup
- vaksel 18y agoprobably an opportunity here, since all of the VCs are asking for the same exact information, have a website that has the information for multiple companies in the same place
- teej 18y agoThat's what CrunchBase (http://www.crunchbase.com/ http://www.crunchbase.com/) is. The phone call definitely serves more of a purpose beyond data collection - pitching the company and verifying legitimacy.
- vaksel 18y agoWhat do you mean by verifying legitimacy?
- teej 18y agoMaking sure there's actually a company behind the website and not just a 13-year-old kid who's good at FrontPage.
- vaksel 18y agoif its a startup that they think is good enough to pitch to, why should they care?
- teej 18y agoBecause VCs invest in teams with good ideas not in ideas alone.
- vaksel 18y agoyes at the earliest stage, when its just an idea, and nothing more. But we are talking about something that has already been built. Something that is already popular enough to catch the eye of VCs. So obviously the team is good enough, if they arrived at that stage. If they didn't have a good team, they wouldn't have arrived at that stage to be hounded by VCs.
- deleted 18y ago[deleted]
- unalone 18y agoThen tell us about your personal experience. Don't make claims without explaining yourself. EDIT: Or you can delete your post, Teej, which said "VCs don't invest in things that are actually relevant, take it from personal experience." If you don't want to explain something, then just say it, apologize, and move on. Don't try to hide what you said.
- teej 18y agoIt wasn't a matter of hiding what I said. For legal reasons, I can't really comment on my experience. I'm sorry that I can't back up my opinion.
- unalone 18y agoAh! Very sorry. That makes sense.
- ia 18y ago"I am generally hostile." apparently.
- unalone 18y agoHostile is a good way to be. It means forcing people into explaining themselves and the things they do. At the same time, it's a state of mind that lets yourself admit you're wrong, which I was this time.
- Harkins 18y agoBecause they are humans who need to form social connections. If they were programmers they would realize the information was logically equivalent whether it was gathered from CrunchBase, the company website, or a phone call with a smooth-voiced young man who claims to be a founder.
- josefresco 18y agoIf there's a 13 year old using FrontPage to build his startup in this day and age, I definitely want to meet him.
- mkuhn 18y agoThis article clearly shows the fear VCs have to miss the next big thing. IMHO thats why they try to collect data on as many companies as possible and according to the article that happens without much coordination or without a clear goal. At least from the outside it seems like an effort to only cover their asses.
- drusenko 18y agoSame thing happens to us all the time, really annoying. I've had some associates have the balls to call us up, not do any research, and then try to lecture me on how we should be running our business. Fortunately, I've had a few "hero" associates who have dug down deep into my social network and found friends that we share, or read quite a few of my blog posts. Either way, I've found that these associate calls are a complete waste of time. It can be hard enough getting taken seriously if you aren't brought in by the right partner, and getting funded off of an associate or analyst introduction is very unlikely, despite the fact that each and every one of them makes it sound like they are ready to cut a fat check on the spot.
- jaspertheghost 18y agoThere's smart and then there's perspective. VCs are smart, but they're looking for perspective. They're cold calling you to understand your company and your space and try to possibly invest in you. In fundamental analysis, they call this the scuttlebutt approach. From our personal experience, we've even gotten partners who haven't done their research. The would immediately want to go into the demo during the pitch. When we meet the occasional partner and associate who actually knows the space and the product, we are more than impressed. In reality, if you only vaguely know the space and you're asking retarded questions about engagement and metrics, you're not really adding value. We judge VCs by their questions.
- deleted 18y ago[deleted]
- bl00m 18y agoI wish i'd be in that position that it happens to me at all
- sonink 18y agoBang on. About time someone took the VC's to task.
- ryanwaggoner 18y agoYeah, no one ever does that :)
- edw519 18y agoBecause, honestly, it’s so bad out there, that it would probably take very little to actually impress us even a little bit. Brilliant! Applies to much more that just VC.
- ken 18y ago"When looking at the men of today [...] those who seem like real men [are] few. Because of this, if one were to make a little effort, he would be able to take the upper hand quite easily." --Yamamoto Tsunetomo (1659-1719)
- deleted 18y ago[deleted]
- releasedatez 18y ago"rare position" indeed but that also means it's a solid business. Congrats!
- davi 18y agoTwo paragraphs lead off with the "Now, <statement>" construct: "Now, our funding situation is that..." "Now, we understand that..." I'm starting to get sensitized to this construct. The 'now' is like an 'um' -- i.e., filler -- except, it's an 'um' that says, "I am about to say something authoritatively." Obama uses it a lot, too. I'm starting to flag it as sort of poser-ish. The content of the article was super high quality, and outweighed this nit.
- gabrielroth 18y agoObama uses it when speaking without a script, right? In that circumstance it's a kind of time-filler while he arranges his next sentence in his head -- he often uses a long, drawn-out 'Aaaaand' in the same way. At least it's better than 'uh,' which is what most people (including me) use. But in written English it serves no purpose.
- tonystubblebine 18y agoOne of the most important things I had to learn when I started my company was how to quickly get off the phone with people who wanted to waste my time. It seems trivial, but in an effort to be polite and not burn any bridges, I was wasting a lot of time. Plus, these sorts of conversations often left me feeling angry. So I developed a system. Step one is to be clear with yourself about what you're looking for. We're not looking for funding and if we do, we will mine our own network for introductions to VC. We don't do partnerships unless the partner already has a customer who is asking specifically for us and who is willing to pay for any integration work. We never work with recruiters and haven't had any problems finding the people we need. Step two, is to develop a script. Here's an example, "I appreciate your call, but we don't work with recruiters and are happy with our current hiring practices. Pause. Have a nice day. Pause. Bye. Pause. Click." If I only say nice things, then that leaves me in a good mood at the end of the call. My barber just hangs up on people without saying a word. But that doesn't work for me. Neither does yelling at them.
- gabrielroth 18y agoIf you have a chance to prepare before the calls, they must be prearranged, right? So why not send a form email that says, 'We're flattered that you'd consider working with us. We're not looking for funding right now, and we're really busy improving our product, but if you have any thoughts on what we could be doing better, send me a short memo at this address, and we'll follow up. For more information on our company go to wufoo.com/faq.' From what I understand about VC psychology (all from PG essays and this site, not personal experience) this would drive them mad with desire. Plus you'd save a lot of time.
- alain94040 18y agoI love this! It will indeed drive some of the VCs nuts. And it's the ultimate test. Everyone's money is the same. What can you bring to the table beyond a check? Tell me something smart and I might take your money. It's the right way for a founder to do due diligence, and it puts the relationship upside down with VCs. I'd love to be in that position. I got my share of calls from VC associates, but the real VCs I care about barely give me more than the time of day.
- bobbyi 18y agoThis sounds like your fault rather than theirs. You have VCs who are inviting you to pitch your company to them, you are accepting their offer and then getting upset that they actually expect you to pitch them. The point of an intro call is that you tell them what you are up to and they tell you what their firm is about. If you aren't interested in hearing about their firm and and you don't want to explain to them what you are up to, then don't waste their time and yours with the phone call.
- fallentimes 18y agoBut it's the other way around. This isn't the typical startup hustling for VCs intros while hoping to get funding. Wufoo is profitable and growing. And Wufoo is in the very fortunate position of having VCs sell them on the idea of taking money. So far, the VCs appear to be doing a piss poor job of it.
- pj 18y agoThere is an impression among VC's that every startup wants their money. We've had calls like this too. We tell them we are building sweat equity and they offer to call next quarter to check on our progress. I suspect the author of the blog post could do more to change the situation into one that is mutually beneficial. Why not just reply to the initial email with a link to a page that has answers to the common VC questions? Let them fill out their spreadsheets from that. Unfortunately for Wufoo, they are losing the opportunity to have a productive conversation by allowing it to repeat itself over and over. If they "know" how the conversation is going to go, it's their responsibility to move it in a different direction.
- Eliezer 18y agoI suspect this is a case of "poor venture capitalists circulate more", like poor programmers or poor boyfriends. See http://www.overcomingbias.com/2007/03/you_are_not_hir.html http://www.overcomingbias.com/2007/03/you_are_not_hir.html
- skmurphy 18y agoThere is another reason why some of these calls may be made: due diligence before investing in a competitor. This would explain why VC's ask for an explanation of things that are obvious and available on the website: they are looking for any unreported changes, and trying to get some nuance by talking to a founder. I like the WuFoo folks and have been impressed with their approach and their application ever since I saw them at the first Office 2.0 conference, but one thing they may not appreciate is that their business stands as a beacon pointing at a large and profitable market, and their lack of desire to take funding means that some other team may be using them as a proof point. Naturally a VC firm will contact them before making an investment in a competitor. I am not suggesting that it's every call, but it's likely to be some of them.
- Mistone 18y agowhat a great blog, nothing will make them lust after you more then swatting their week attempts back, human nature meets capitalism.