January 9, 2015
Entrepreneurs are always on the hunt for VC investors. Some may be under the impression that VCs have it easy- but they really are a hard working bunch. There is a lot of information they have to process in a short amount of time, and they must make the right decisions as often as possible. After all, they are responsible for large sums of money (both theirs, and other peoples). Being a VC is very stressful, and there are several rules they must follow to be sought after by the entrepreneurs with the most desirable product/service.
4 Traits Entrepreneurs Expect VCs To Have
If a VC invested in a company, they should not engage others that can be considered a competitor. It’s also unethical to engage with companies that are a part of a space they aren’t even willing to invest in. Sure, it’s understood that partners sometimes want to bring in companies for the sake of extracting information, but there are other ways to arrange such meetings without disrespecting the entrepreneur. The VC would be a gainer in the short-term by having the information they sought. However, once the entrepreneur is left with a poor impression of the VC, the damage done to the reputation of the VC would be extremely difficult to repair.
VCs are generally known to be (extremely) late to meetings, especially those from top-tier funds. Entrepreneurs gravitate towards VCs that have a reputation in respecting the time and schedule of those they are meeting with.
Arrogance is a trait that many VCs possess, which stops entrepreneurs from even considering to reach out. Word does travel fast between circles. Humility goes a long way with entrepreneurs. For example, if a VC isn’t an expert in product development or marketing- it’s okay. VCs aren’t expected to know everything about everything. They would be better off asking questions about what they’re not familiar with, rather than offering solutions that they themselves are unsure about to mask their confusion. There will be points where entrepreneurs will discuss the challenges they are facing, but that doesn’t necessarily mean VCs are expected to give advice. Rather, it’s a opportunity for VCs to probe the situation by asking questions, so the entrepreneur could come up with the answers on their own.
VCs are expected to be comfortable with just saying “No,” to products/services they aren’t willing to invest in. Entrepreneurs are frequently left hanging after the A round, with positive indications from VCs. But then they don’t hear from the VC again. If VCs would openly and honestly say “No,” to entrepreneurs, the entrepreneur would be left with a better understanding of the expectations of the VC and how they operate. The entrepreneur would then know what would be worth presenting to the VC in the future, and how to go about doing it.