How to Lose a Startup in 5 Simple Steps
A Practical Guide for Jerk Venture Capitalists
I talked to dozens of VCs while raising funding for Filmaster. Most of those chats were very interesting and we learned a lot on each meeting even if there was no follow-up. Some investors turned out to be assholes, though. This post is about the latter.
Once upon a time in not so distant past I had a short meeting with one of the Eastern European’s new venture firms that claimed to have huge plans to become a market leader over the next few years. I’ve recently stumbled upon numerous stories from founders who they made deals with during the past years, so I decided to refresh the blog post I wrote shortly after that meeting. Hope it serves as a warning.
If you’re reading this and you’re a VC that’s fed up with startups, here are the five simple steps you should follow to make sure you lose all the best opportunities.
- Start with stating that you know nothing about the company you have invited and you don’t even remember its name as “there is so much stuff on your head right now”.
- Show your ignorance by not knowing the major European seed funds and incubators that the startup went through.
- Play with your mobile phone when the CEO pitches his company to you. Look in the opposite direction showing how much you don’t care about all of it.
- Laugh loudly when you hear how much the startup wants to raise and scream hysterically when they say how much stake they are willing to give away. Then, offer them 10k EUR for 51% of the company and show your smartass face number 3.
- At last, when asked by the startup’s CEO to say a few things about yourself as a VC, reply angrily that all the details will be on your website soon. Then reluctantly start bragging about your past achievements staring at the ceiling.
All that actually happened for real, in Warsaw, Poland, in Summer of 2012. We were surprised at first, amazed later, and eventually quite annoyed as it turned out we wasted our time. After all, it was the VC that approached us, not the other way around, so we expected at least a good will. What’s even funnier, though, is that those guys seemed genuinely interested in our product and business model. It probably didn’t even occur to them that they might have done something wrong. They asked us to “work more on the model with their analysts and then come back to talk again about the deal”. We politely refused the offer. At that time we were already at a late stage of raising capital. We sold the company 3 years later.
Multiple founders approached me during those years asking about that specific VC. I discouraged every single one from even having a chat with them. I’m sure others, who had the displeasure of dealing with them, did exactly the same.
Being a VC must be hard work. You talk to many startups, you like them, they seem to want your money, but then you only read on TechCrunch about the deals they made with others. You end up with the shitty deals, so you moan about how hard it is to find a good startup to invest in and you wonder how come you always miss the Skypes and Soundclouds of the world.
But I know why it happens.
It’s actually quite simple.
It’s because you’re a fucking jerk.