Dear VC’s, please don’t be assholes.

Let me tell you a story:

My company, Shortcut, along with 10 others was part of the Techstars London Summer 2014 cohort. Through the programme, 3 companies, Shortcut included, were introduced to one particularly prominent VC.

Unfortunately, each of us has had a horrible experience with this VC. For me, an hour long phone call turned into radio silence. Follow up e-mails were ignored and there was zero future interaction.

For another of the companies, lucky enough to nab an in-person meeting, the VC turned up 10 minutes late, and told them they only had 20 minutes because the VC had something more important afterwards.

Now, anybody who asks my opinion on this firm gets a vitriolic response. And it’s the same from the other 2 Techstars companies, one of whom is based in Israel and the other in SF. So that firm’s horrible reputation is now travelling to 3 different startup hubs.

Anyone I’ve talked to since only has bad things to say about this firm. It will not be long, if it’s not happened already, until this particular firm really starts losing out on potential deals.

Almost no successful startup looks like the rocket ship they may become when they’re raising that first round of venture capital. Uber was turned down a tonne early on and Airbnb had to sell ObamaO’s at the Democratic convention to make some money. I don’t envy VC’s trying to find the diamonds in the rough but that doesn’t give you carte blanche to be rude and act like an asshole.

Entrepreneur’s should absolutely expect to receive some, if not lots of no’s and they should be able to take it on the chin and move onto the next one. One needs to be thick-skinned for this game.

However, with few exceptions, including this great post from Gil Dibner of DFJ Esprit, few people talk about what should be expected of the VC, in particular when they say no, so let me try.

Stage One: Being introduced by someone you trust

You, the VC, have received an introduction to an entrepreneur from someone you trust. They’ve given you the 5 sentence pitch and you’re not interested.

A quick, concise no is all that’s needed here. An explanation (e.g. not a good fit for our portfolio etc) would be great but isn’t necessary. I had a great experience in this scenario with Hunter Walk. We were introduced by a former colleague of his at Google, I gave my quick e-mail pitch and Hunter responded in a couple of hours, just to say that it wasn’t for him.

That’s all I ask. A quick no. Zero prevarication and not ignoring the e-mail so I have to wonder if he got it and chase up in a week.

Stage Two: First real interaction (in-depth call or meeting)

As the VC, you’re interested in this business but want to find out more. You have the call or meeting (not a formal pitch) and decide to pass.

A no with an explanation for the outcome would be great here. There was obviously something about the business that piqued your interest but after delving in more, you decide to pass. Giving feedback to the entrepreneur will help them significantly more than it will hinder you in the extra time it takes you to type it out. Don’t forget, you get pitched all day long but this might be the first time an entrepreneur has spoken to a serious investor so please take the time to share your thoughts as your feedback can make a huge difference.

I know of situations where entrepreneurs have gotten to this stage with investors only to hear nothing from them afterwards and have e-mails ignored. That’s just a dick move.

Stage Three: Formal Pitch and a delve into the forecasts

You, the VC, have had the first meeting. You’ve done your research and now you’ve invited the entrepreneur to pitch to your Partners. Your firm decides to pass.

The feedback from this interaction would hopefully have in-depth reasonings and explanations hitting on a number of different points where the entrepreneur failed to convince the partnership and needs to improve.

If you have a personal relationship with the entrepreneur, a rejection at this stage, would be better done in-person or on the phone than via e-mail. There’s no problem being brutally honest about why you passed but be constructive with your criticism. If there is a possibility of your firm investing in future rounds, give the entrepreneur milestones to reach that would make that future conversations worth having.

As much as investors talk to one another, entrepreneurs do too and if they have a bad experience with an investor, they’ll only be too happy to tell others about it.

The startup ecosystem is small. It’s tough being an entrepreneur and I can’t imagine how tiresome it is being an investor and getting pitched at all day or having your phone hacked so people can get your attention.

But in the relationship between early stage companies and VC’s, the leverage is mostly on one side. So please be respectful of the entrepreneurs time and effort and take that into consideration when you deliver your verdict.

Please reach out to me @RichHoward84 with thoughts and comments.