Often entrepreneurs walk into the office, pitch and expect a check. What they fail to realize is that developing the relationship with your VC is as close to a serious dating relationship as it gets. I know, VCs sometimes act as the prettiest girl in the room but still, they are desirable.
The beginning: As with dating, odds of getting some serious attention go way up if some mutual friend makes the introduction. If this matchmaker also does the pre-selling, than it is much more likely that you will want to take them back to you house/office 😉
Of course you can go to single bars (meetups) and web dating sites (direct site contact) but this is less effective and demand a long time and effort in order to develop intimacy.
Either way, being passionate, upbeat and a good salesmen will earn you points but it is your idea (looks) that will make the first impression.
BUT More often than not, people will never pass this stage and will be qualified as “one night stands” . This happens either because they are jerks ( not that common) or simply because the chemistry wasn’t there.
Next Step :The whole dating thing is about getting to know each other. We want to know that besides your striking idea, you can also evolve and charm me in other ways.
Some entrepreneurs come in, pitch and when we call them back sometime later, in order to check something, they haven’t advanced at all. Most exciting entrepreneurs I met, always had something new happening… always had advanced on something and would be willing to talk about it. It was also super effective when they would call me just to say hi (update me on a major advancement). This kept me thinking of them and excited about advancement.
At this stage, I also want to know that although you are and optimist and gorgeous, you also know your shortcomings and have plans on how to deal with it. Denial or stubbornness, will not get you points.
If we decide that we better meet your family (due diligence), please beware that I’ll go deep. I’ll talk to you mother, father and your co-workers. Although I don’t really want to find anything that lets me down, I’d rather have it come out before we get too serious.
The parallel discussion about the relationship ground rules (term-sheet) is key. You have to be comfortable with the rules that will shape our relationship. These rules should be equitable and both sides should understand them.
While getting used to the other and the rules of the relationship is difficult, this discussions should be done in a way that keeps the relationship unharmed. These negotiations are not to be combative as you are both trying to build a longer term relationship
When you do finally decide to get married, it is going to be a great moment for both sides. You will both celebrate and make it public. You will start then a honeymoon. Enjoy it!
Passed the honeymoon, demands will start and you will have good days and bad days together. Maintaining respect and working together to solve the problems is the only way the two of you will be happy. As some companies will get funded by many VCs, this ends up being a polygamy and, therefore, much more complex.
Probably the hardest decision you will have to make together is when to have a baby (exit). And as with a relationship, you 2 will have very different perspectives. While the VC needs to guarantee X times their investment, the entrepreneur needs an absolute value to satisfy himself. As with a kid, talking about this ahead of time, makes the relationship easier.
At last, once you’ve done it once, it is much easier to do a second time around.
One thought on “You and your VC – The dating game”
Great post! Indeed VC / Enterpeneur is like dating, and as such, the first time you talk to one you are not really sure what should you say, or keep for yourself.
Anyway, after a few times talking to them, you get more acquainted and start to feel more confident. That is sure to enable more fruitful relations
Anyway, keep up the good work at the blog and at WH.