Why the founders of VCS ghosts or reject deals and never talk to the founder again

The ghostly ghost is never fun. Especially if you are a founder who is looking for capital from investors.

It’s like dating. You may be wondering, “Why doesn’t this person come back to me? Did I do anything wrong? “Did the investor hate the product? Wasn’t he interested in me personally? “It is enough to drive everyone crazy.

The ghost is an indisputable signal of lack of interest. If VC wanted to invest, he would definitely respond to your cold call or contact you after the pitch.

There are various reasons why VC may disappear after the founder thinks he will agree to a meeting or a worse one, after a few VCs who spoke to TechCrunch.

Time

The weather is the most notable resource of people, Mercedes Bent, a partner at Lightspeed Venture Partners, wrote in LinkedIn Post On the topic of VC ghosts, which became viral. VCS will naturally spend more on the founders and startup companies where they see potential.

“Writing a deliberate rejection takes effort and when the pass will not” transform “(into investment), it is often devioryitized. Not to say it’s good, “she wrote in her LinkedIn Post.

Bent also notes that the investment environment has shifted in the last decade so that the VC has to make decisions faster and thus have less time to return to the prospects.

“VC is ballooning at Breakneck speed – more companies, more capital, more terrains,” she writes. “With a bigger focus on volume and speed, there is little space for intentionality and personal touch that have ever determined the industry.”

Such a rapid growth has created a crop of breaking and burning, in which relationships feel more and more transaction, she added.

Better the co-founder of Tomorrow Ventures and General Partner Sews Monot says that things most often sneak through the cracks when he is “super sunk.”

“Here it never applies to the founder and always what else is happening in life – such as if we are raising funds or this is the week of the founder’s camp, our AGM, Money 2020, etc.,” he told TechCrunch.

Eric Ban, co -founder and general partner of Hustle Fund, relies on an automated email response to help him manage the influx of incoming transaction he receives in his input mail. He estimates that he receives about 30 incoming terrains a day.

“I have a constantly created by the office email that will respond to any instructions on how the founders can engage with our investment team through our form on their website,” he told TechCrunch. “Our team seriously accepts every submission, but I just can’t answer every email request as much as I would like.”

Now, if he has already made a meeting with the founder, BAS claims that he will not “ghosts”.

“When I have to hand over a deal, I will explain why I go through and share some feedback,” he said. “This is a simple label that I wish to deal with more and more consistent.”

Red flags that will lead to rejection

Ironically, an investor who wished not to be baptized quoted powerlessness with the founder’s founder generated by AI, telling TechCrunch: “It’s so much to drown all the real work. I can say that it is generated by AI because I get dozens with the same structure, but different words and there are always some strange inaccuracies. It will just burn all written information as a channel to reach new people. “

So, while VC may like to support AI startups today, many of whom write emails, they do not want to be at the end of receiving them.

“In the end, we’ll just filter every email from an unknown sender, as it is probably generated by AI message,” she added. “So, in order to meet someone new, you will literally have to face them socially (warm intro or personally). Back to the Stone Ages! “

One thing that really annoys Ban is the lack of self -awareness. Do not try to claim that your startup has no competitors or is not facing existential risks, for example.

BAS usually asks the founders during the pitch what can kill their business. A shocking number of founders will answer: nothing.

“Everyone with just self -awareness knows that it is absolutely not true,” he said. “So many things can endanger their business: competitors are superior; markets facing new compliance or regulation; New pandemic. “

As a potential investor, BAS wants to know that you see not only the risks but have plans to soften them. “As a legendary CEO, Andy Grove from Intel, once said,” Only the paranoid survives, “he said.

Mohnot says that if a founder cannot explain how they will grow their business beyond the original concept, it takes into account. But the opposite is also true: unrealistic expectations are a red flag, noting that it is excluded from the founders who claim that their launch will “destroy the whole industry” or design “wild optimistic financial forecasts without solid evidence”.

Other things he finds a twist: apparent tension or lack of additional skills among founders members, which implies potential problems with cooperation; Lack of technical depth or over -emphasizing fundraising, as opposed to “building a sustainable, valuable business”.

Rex Salisbury, founder and general partner of Cambrian Ventures and a former Andreessen Horowitz (A16Z) partner, wants to see that the founder is on the cusp of things. He looks at the pitch with a date in the name of the file, which is six months old as a red flag. However, the presentation of the numbers will be completely detached from Salisbury.

Founder’s behavior

There are other behaviors that will end your VCS conversations. For BAS, if the founder says something racist or sexist, they are cut off.

“The founder actually once called a competing founder in front of me,” he said. “I have no tolerance to spend the next decade working with someone who has so little respect for other people.”

The founders should also bear in mind that even if an investor rejects them now, they may consider working with them later. So being disrespectful when rejection will probably kill any chance of it, and can also make VK never talk to a founder again.

BAS says that sometimes the company has provided him with a detailed feedback on rejection and then the founder will “turn and call you names and/or even threaten you.” He notices that this happens more to his colleagues than his wives than to himself.

“I am grateful when these moments happen, because it means that we made the right choice not to choose to work with this founder,” Ban told TechCrunch.

“This person is also on a black list – we will not respond to this person again and the interaction will be recorded in our internal database so that our institution avoids them forever,” BAS adds.

All VC, of ​​course, said that dishonesty was the killer of an instant deal. Addie Lerner Katz, the founder and managing partner of Avid Ventures, pointed out that dishonesty could take place in various forms, including exaggeration and lack of transparency.

It is also excluded when the founders talk negatively about current or past investors or colleagues. Negative reference calls are another reason for a pause for Lerner Katz.

“In each of these buckets, we take very seriously” yellow flags “and usually consider them as disqualifying,” she told TechCrunch.

Monot recalled an incident in which founder lied to a deal with another startup. The other startup happened in Mohnot’s portfolio “So a quick text message arranged it.”

But lying as a whole for indicators, team capabilities, market size or technological impacts will often also be easily exposed by VC.

“This happens more often than you think,” MES said.

All VC still thinks that there is no real excuse for not sending a simple “no thank you” tracking to the founder if they actually had a meeting with a founder. As Bent said, the ghost happens anyway.

“I’m not saying any of them is a valid reason. This is reality. This is the game, “she wrote.

But given the risks of behaving badly to the VC that has stopped talking to you, it also suggests that the golden rule applies to both parties. “Treat people how you want to treat.”