4 Things Some VCs Do That I Don't Like | Hacker News Reader

4 Things Some VCs Do That I Don't Like

bhorowitz.com

49 pointsgatsby15 comments

> The valor to tell an entrepreneur precisely why you are not going to invest in her company rather than giving the traditional “VC no” by just going dark.

When I was raising an angel round for my last company, one well-known angel promised us an answer 24 hours after we met with him. He gave us a "no" the next day. But I respected him tons because his quick decision made him stand out markedly from everybody else we talked to, most of whom gave us the "VC No" by requesting lots of meetings and / or going dark.

This is probably one of the most frustrating aspects of the whole process. I'm raising money for Forrst right now, and I've lost count of the number of folks who have done this. They make it seem like saying a two letter word is some superhuman feat. Makes me extra grateful for the guys who stuck to their word and followed up quickly with a yes/no.

By going dark many VCs assume that they preserve their options for getting into the game at a later point. Most VCs don't want to give you a clear "no" because they know pretty well that you might change your business model, technology or even team very quickly especially when you are in the early stages (ie pivoting). And by telling you what exactly they are not liking about your startup, VCs are afraid that you might take it personal as well (just as some people take a "no" personal). And then there are VCs who want to get some more insights into a specific market or technology to use that for one of their portfolios.

It's called SHITS. "Show high interest, then stall." They're waiting for validation from some other VC. "Oh, Sequoia is interested??"

lacking experience, i'd think that to say 'yes' is much more scary than to say 'no'! :) that would be the courage.

i mean i am not offended when someone doesn't reply. the deal is not done until it's done, so it is always 'no' until you sign the papers. (endless meetings are worse, but we should just concider them as 'no', not 'maybe' and cancel them when there are too many)

saying NO is really hard, and takes a lot of strength. it's one of the big reasons i am really getting away from investing right now.

Alternatively you could have an "I'll approach you" policy. Entrepreneurs would probably like that anyhow. You could say, "this is not a No, but I'll put you on my list to examine in the future, and will contact you if interested." Then have a private url form to which you could refer people to submit information. All of sudden, you're like YC.

You could give investor friends access to this form too, if the submitter wants to opt in.

Joshua, if I may ask: would you mind elaborating a bit? Is it the fear of letting someone down, concern you may be making a mistake in passing, something else? All of the above? Thank you.

It's just hard to reject people. I'm an engineer type. I like looking at problems and solving them; the harder the better. The difficulty is often that the entrepreneur is the problem. Giving a real reason is tough.

"They confuse pattern matching with knowledge."

Seems we have the same problem on HN...

> They confuse pattern matching with knowledge

> Rather than saying, “Most companies who sell at this stage, regret doing so, and here’s why,” they’ll say, “Don’t sell now, that’s a stupid idea.”

i know why. if they start to explain, the founder will start seek for the reasons why his situation is different. if he really founds, the vc will either fail to explain, either they start an infinite conversation.

that means - pick smart vcs for this not to happen! :)

Interesting article. Makes me wonder what people's overall experiences have been with VCs. We're on the verge of taking that step and I've only heard horror stories so far. Any positive stories out there?

I loved mine so much I took money from them again.

It's good to know about this things that VC's do. Especially this last thing about they toughness that sometimes is pointless if potential entrepreneur does not have benefit after they say NO.

Good job on making the accurate, non-sensational title HN'ers ask for. I'm sure Ben could have got more attention with, "4 Hateful Things VC's do," but he didn't.

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