It Was the Perfect Deal… Save The Founders
Great firms pass on two deals with solid fundamentals because they had a gut feeling about the founders.
Two companies I loved. I got their mission and their products. They’d already demonstrated incredible traction with little marketing spend. They showed intense knowledge of their markets and reasonable defensibility.
Both went to partner meetings, but in the end the very partners who brought the deal in pulled the plug. In one instance (Company.ly) they found themselves wanting to replace the current CEO and knew it would be hostile. In the other (Company.io) they couldn't put a finger on it but just weren’t able to force a solid faith in the founders—but it was enough to kill the deal.
A year later turns out Company.ly’s CEO fostered a toxic culture that’s driven off half the team. Company.io subsequently became known for terrible customer service and their promising growth has decelerated.