Signs A VC Is Just Not That Into You

http://blog.eladgil.com/2012/07/signs-vc-is-just-not-that-into-you.html

by eladgil • 14 years ago

48 14 14 years ago

blog.eladgil.com

stevenj• 14 years ago

pg's take: http://news.ycombinator.com/item?id=3550195

eladgil4• 14 years ago

Ha. That is pretty good. There are some steps between "Hi" and "Here is a term sheet" but you can definitely tell if someone is very excited.

Unfortunately, it is harder to tell if someone is disinterested as VCs try hard to maintain or preserve relationships for the future, which makes them more cautious in just saying "no" outright. I think the good ones are pretty up front about not being interested early.

pdog• 14 years ago

Here's what Mr. Graham said:

You can translate most of VC-speak with just 2 rules:

1. "Here is a termsheet." -> "Here is a termsheet."

2. * -> "No."

nrmehta2• 14 years ago

The article is good but I don't think it delves into the "middle ground" which is so common for startups. A very small percentage of companies elicit huge interest (i.e., fast action, term sheet quickly, etc.) A surprisingly small set of companies that meet with VCs elicit signals that are clear nos (e.g., not responding to emails and so on). These are usually ones where the idea is so dumb or the pitch is so bad, the VC questions the entrepreneur's capabilities. I'd say the vast majority of meetings turn into this netherland where the VC isn't sold on the idea but also isn't sold on NOT funding the idea. S/he either doesn't know the space well enough, isn't sure his/her partners would agree, doesn't have enough clout in the firm yet (see previous point), doesn't know the entrepreneur well enough to feel conviction, etc. So s/he doesn't say yes. But s/he doesn't say no yet either because s/he wants the optionality in case (a) another VC firm who is well respected or know the space decides to go after it (which creates the super-annoying lemming effect), (b) another partner and his/her firm gets "conviction" on the company independently, (c) s/he hears other good things about the entrepreneur, etc. I think for most entrepreneurs, this is the most annoying category to be in.

eladgil4• 14 years ago

I think in the type of scenario you mention (i.e. lots of foot dragging without a clear answer), 9 times out of 10 the entrepreneur should just quit following up with the VC and move on.

The logic is simple - if the original VC is waiting for a new VC to get excited about it, it would not matter if the original VC is still in the mix or not (as the entrepreneur now has someone else interested). If no one else gets excited, spending time on the original VC is a waste of time, since she won't tip unless someone else does.

nrmehta2• 14 years ago

BTW I don't disagree with what you just said - was just trying to explain this middle bucket because I don't think it's a clear no. Sometimes (very rarely) those middle bucket interactions turn into funding. But I agree w/ you that it's usually a waste of time.

tptacek• 14 years ago

I'd be very careful with this attitude. What VCs are trying to do is retain the option of saying "yes", for almost everybody. They are happy to have your team spend time maintaining that option for them. If it costs them almost nothing, why wouldn't they?

The best rule of thumb here is "maybe means no".

a5seo• 14 years ago

What's a nice but clear way to end the conversation without damaging the relationship in case you want to pitch them for Series B?

gojomo• 14 years ago

Is there a way to turn this around by gently prompting the VC to start playing the role of a truly interested investor? That is, challenge them to reverse some of these listed signals. If as a part of normal conversational cordiality, the VC plays along (to avoid sending a clearer no-interest signal), eventually they're hypmotized into thinking they are interested?

For example:

"What are your suggested next steps?"

"When should our next in-person be?"

"Which more senior partner will be handling the next steps?"

"Why should I take money from your firm?"

ramblerman• 14 years ago

Are we really reduced to this...

Half of these could come straight out of Vogue, "How to tell if you're date liked you?"

Signs A VC Is Just Not That Into You

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