This post is the first in a series of startup tips & tricks related.
I’ve been reading a lot a good stuff about this subject and I’m not going to cover that here.
However, the most important thing is reduced to this: do you think this VC or the other one is the best fit for your company? As a startup founder it’s very difficult to take the best decision when you need money to pay the servers…
So how do we decide? A lot of startups were asking me: is there a method / algorithm to see if an investor fits your values, apart from money?
My friend Walt is always saying there are 2 types of VCs: the nonbeliever and the believer.
That’s it, that is all. It says it all.
A non-believer investor is a time consuming relationship and brings only bad energies and lot of other shit along the way. They invest based on numbers, metrics, if they understand the market and something else. More than 60% of the investors are in this pot. They are mostly anti-innovation.
The Believer – is the one you’d want on your team. It is the one that makes shit happen when no one else is. Usually this investor brings on the table a lot of other things, like network, business know-how and a “I can do it” attitude.
Well, the fucked up thing is you can’t see that from the start. You can not see this qualities in a VC right from the start, so yeah…. Sucks to be you, homie.
What we as entrepreneurs can do it to get things done step by step and select investors very carefully through a due diligence process. It’s more dangerous for us to get them wrong then it is for them to invest. I’m saying this because most of the times a good startup idea can AT LEAST be sold to a big company and they VCs get the money back eventually.
I am advising startups in UE and USA and everywhere we see the same bad VC behaviour. I think it’s time to change this somehow. I don’t say I know how, but I hope one of us, the entrepreneurs, might have an idea.
Remember: Selecting the wrong VC is worst than having no VC.
Let me know how that worked up for you in your next round. Try to keep this in mind and try to think 2 steps ahead in future – make up some scenarios – and imagine how this investor will behave in all of them.