Cash is king, so venture capitalists often have the upper hand when it comes to meeting with early-stage entrepreneurs.
But when startups become big and awesome, the tables turn. Some venture capitalists get that. Others don’t seem to.
One frustrated entrepreneur, Andy Dunn, has met with a number of investors for his clothing startup, Bonobos. He wrote a rant that described “dumb VCs” he and other entrepreneurs have dealt with.
Bonobos is an e-commerce company that has raised more than $70 million. Its clothing is sold online and nationwide in Nordstrom stores. Dunn raised $30 million in March, and that fundraising process may have inspired the rant.
Dunn described one “dumb” investor he met with six times. That person never offered to invest but he also never turned Dunn down. Instead, he just wasted Dunn’s time. Later, when Dunn didn’t inform him about his funding round, the investor acted confused.
“Dear Dumb VC, it’s not my job to call you. It’s your job to call me,” Dunn writes. “And the fact that we spent all that time together, and you never got me a term sheet is a strong indicator that you’d rather do what’s in your worst interests than what’s in my best.”
Jeremy Lieu of Lightspeed, however, wowed Dunn. Lieu came into his first two meetings visibly prepared.
“One of the reasons Jeremy Liew from Lightspeed is an investor in Bonobos is he showed up in our first two meetings wearing my pants!” Dunn writes. It proved Liew had tried Dunn’s product.
Dunn concludes his post with another anecdote from a fellow entrepreneur. The founder is now working on a billion-dollar startup, but early on, he was blown off by a VC.
“This VC was 70-five minutes late to meeting with me. He never called to say he was running late. When he got to the office, I wouldn’t meet with him. He groveled to get into meeting with me, and my team was pressuring me to just take the conversation, but I told them to politely tell him that he missed the meeting. That night, as he had flown into town to see me, he kept offering drinks or dinner to make up for it via email. He then went so far as to say his partners would be livid with him for screwing this up. I never took the meeting with him and I never rescheduled. I’d never get another meeting with him if I blew off his time like this, so why should he get another meeting with me?”
“Dumb VCs” aside, even good VCs have botched great startup deals.
Here are some of their biggest regrets.
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