Are you making the same mistake when you meet with VCs? Photo by Sebastian Herrmann on Unsplash
Some of the most interesting and insightful conversations I’ve had in my life were with venture capitalists. The conversations would often happen in unique places. Everything from fancy highrise offices in New York City to trendy coffee shops in San Francisco, and even the occasional extravagant hotel lobby. Heck, I once had a pitch meeting with a VC on his private jet because that was the most convenient opportunity for him to meet. We spent two luxurious hours sipping cocktails at 40,000 feet and talking in-depth about my startup.
At the end of that conversation, and hundreds of others just like it, I often came away feeling more than just confident I’d be getting funded. I’d walk away from my conversations with VCs feeling like I’d found genuine startup mentors. They were people who truly understood my idea and cared about helping me make it successful.
Rarely did it ever work out like that. In fact, I can count on one finger the number of long term relationships I built while fundraising with investors who never invested, which, considering I’ve met with hundreds of investors, isn’t a great conversion rate if the goal of fundraising was to find mentorship.
To be fair, that’s not actually the goal. The purpose of fundraising is to get investment for your startup, meaning success isn’t counted by the quality of advice you get.
Regardless, the lack of any sort of clear correlation between conversation quality and long term relationship between founders and VCs is confusing not just for me, but for lots of entrepreneurs I’ve spoken with. I’ve asked plenty of them, and most seem to feel the same as me. They felt like they had meaningful and successful conversations with investors, learned a lot about what they needed to do to make their startups successful, but rarely ever talked with those investors again.
So what’s happening? Why can conversations with investors go so well, only to have them not even remember your name within a few weeks?
The answer, of course, is that meeting with entrepreneurs is a huge part of a VC’s job. It’s how they find the best deals to invest in. Because of this, being giant a$$-holes wouldn’t make sense.
Instead of being jerks, investors are fantastic at being friendly and supportive. To be clear, they’re not being deceptive or cruel. They’re just doing their jobs as best they can.
Unfortunately, lots of entrepreneurs — especially the ones who are new to fundraising — don’t realize this. They’re used to the normal professional world where having long, thoughtful, and compelling conversations with experienced people often leads to lasting friendships. Not necessarily someone who’s going to be best man at their weddings, but certainly a person who’s going to be a meaningful part of their professional lives. Someone they can rely on as a mentor and confidant.
This is a mistake I made often when I first started fundraising, and, in retrospect, it was one of the biggest mistakes I made. I misunderstood the purpose of my fundraising pitches. I’d have wonderful conversations with VCs that would end with kind phrases about how interesting my project was, how excited the investor was to learn more, and how important it was for us to keep in touch. Based on those conversations, I’d assumed I had accomplished more than just get investors excited. I felt like I’d made lasting connections with people who were genuinely interested in supporting me and my company in whatever ways they could. But that was rarely the case. Most of the VCs I’ve spoken with over my years of fundraising — no matter how good the conversation — probably forgot my name after a few weeks. They weren’t trying to be my best mentors and biggest supporters. They were investors looking for the right company to invest in, and mine wasn’t it.
Again, it’s not because they’re cruel or manipulative. It’s because meeting with entrepreneurs and having thoughtful conversations with them is a huge part of a venture capitalist’s job.
When you’re fundraising, don’t forget this. VCs aren’t looking for startups to mentor. They’re looking for investments to make. No matter how wonderful and insightful your conversations with them are, any advice or resources they give are superficial at best. If you want real support for your startup, look somewhere else.Want more lessons about startups and entrepreneurship? Take a (FREE) mini-course with me right now!
My Biggest Fundraising Mistake Was Not Understanding the Real Job of a Venture Capitalist was originally published in Entrepreneur's Handbook on Medium, where people are continuing the conversation by highlighting and responding to this story.
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