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Raising Venture Capital – Horror Stories and Other Bad Behavior




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Venture Capitalists – an entrepreneur’s best friend? Worst enemy? Soul-sucking bane of existence?

Here are some examples in which the entrepreneur-VC relationship failed. Most of these accounts come from entrepreneurs themselves, so they might be more than a little biased. In any case, there are a wealth of examples of what could, and did, go wrong when dealing with VCs.

Study these and hopefully you’ll never find yourself in their shoes.

  • A tale of two financings – Excerpt: By June, prototype in hand, Francis and I applied to a handful of business plan competitions to try to drive early awareness and maybe even some cash.  Though we made the finals in 3-4 competitions, we typically found ourselves going head-to-head with venture-backed startups or companies that had launched up to 18 months prior.  The old “PowerPoint and a smile” play was massively outgunned and was periodically met with laughter, which was particularly tough for me early on.
  • The really annoying part of raising VC – Excerpt: It included some well known firms that made me come for a team pitch and then only gave me literally 15 minutes when we’d scheduled an hour… Man in back of room (the plonker who was 30 minutes late) is now on his Blackberry. No joke. Late and not even the courtesy to listen to me. The partner who said we “must meet this week” is shuffling through his papers and not listening to me either. Partner 3 is listening intently and partner 4 is looking patronizingly at me waiting for the killer question about how on Earth I was going to beat Microsoft.

If you’re curious, here’s a Rumor on who the VC was

  • How to raise venture capital – Excerpt: With my first software company, Crazy Egg, my business partner and I spent 6 months doing a dog and pony show in front of 21 venture capitalists and none of them were willing to give us money.
  • Dont raise venture capital – Excerpt: During a panel discussion, a well-known and quite successful venture capitalist was answering questions from the audience. As this VC was speaking, I could see the entrepreneurs in the audience becoming depressed as the VC made it clear how hard it was for the typical Web 2.0 company to create venture returns, and thus how difficult it would for the startups in the audience to raise venture funding.
  • The Arrogant VC: a view from the trenches Contains 8 reasons “why VCs are disliked by entrepreneurs,” each complete with an example story. Excerpt: “probably more than half of the VC pitches I have done have involved participants on the VC side who have behaved in a rude and disrespectful manner“.  Arriving late, cutting out early, reading blackberry, constantly interrupting pitches, taking calls, you name it.  Some of the pitching experiences border on the ridiculous, as evidenced by a young founder who got invited to pitch for fifteen (yes, fifteen) minutes with five minutes Q&A, only to find the meeting started ten minutes late and was not to be extended…
  • Finally, check out These 12 accounts of terrible VC pitch meetings. Most of them, however, are clearly the fault of the entrepreneurs, but they are horror stories nonetheless.

In any case, rest assured that no matter how hard a time you are having raising Venture capital; you chances are almost certainly better than hers! Disclaimer: That video is almost certainly a joke played by a talented actress.

And if you have this startup pitch, most venture capitalists will beat down your door to give you money.

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