Comments on: Pitching the VC partnership http://cdixon.org/2009/08/27/pitching-the-vc-partnership/ Wed, 08 Feb 2012 16:40:53 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tweets that mention Pitching the VC partnership cdixon.org – chris dixon's blog -- Topsy.com http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-9176 Tweets that mention Pitching the VC partnership cdixon.org – chris dixon's blog -- Topsy.com Wed, 09 Jun 2010 17:44:23 +0000 http://www.cdixon.org/?p=452#comment-9176 [...] This post was mentioned on Twitter by Martin Soorjoo, Martin Soorjoo. Martin Soorjoo said: Chris Dixon (Skype, SiteAdvisor , Hunch) on the VC Partnership Pitch http://bit.ly/bcMZMY [...] [...] This post was mentioned on Twitter by Martin Soorjoo, Martin Soorjoo. Martin Soorjoo said: Chris Dixon (Skype, SiteAdvisor , Hunch) on the VC Partnership Pitch http://bit.ly/bcMZMY [...]

]]> By: pete http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-6304 pete Sat, 30 Jan 2010 00:54:09 +0000 http://www.cdixon.org/?p=452#comment-6304 Elie - sounds like you got dicked around by Fidelity, er, Volition Capital. they're real jerks to entrepreneurs. Elie – sounds like you got dicked around by Fidelity, er, Volition Capital. they’re real jerks to entrepreneurs.

]]> By: Being friendly has become a competitive advantage in VC cdixon.org – chris dixon's blog http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-6289 Being friendly has become a competitive advantage in VC cdixon.org – chris dixon's blog Fri, 29 Jan 2010 22:21:36 +0000 http://www.cdixon.org/?p=452#comment-6289 [...] VCs they won’t deal with. (Often because of horror stories like the “partner ambush“). There are so many VCs out there that you can do this and still have plenty of VCs to pitch [...] [...] VCs they won’t deal with. (Often because of horror stories like the “partner ambush“). There are so many VCs out there that you can do this and still have plenty of VCs to pitch [...]

]]> By: Asking for money? | Grow VC > Blog http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-3313 Asking for money? | Grow VC > Blog Mon, 28 Sep 2009 17:55:18 +0000 http://www.cdixon.org/?p=452#comment-3313 [...] Pitching the VC partnership (cdixon.org) [...] [...] Pitching the VC partnership (cdixon.org) [...]

]]> By: chris http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1787 chris Sun, 30 Aug 2009 18:53:36 +0000 http://www.cdixon.org/?p=452#comment-1787 Yep - management fees kill the incentives. If you are interested check out http://www.cdixon.org/?p=443 Yep – management fees kill the incentives. If you are interested check out http://www.cdixon.org/?p=443

]]> By: Elie Seidman http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1786 Elie Seidman Sun, 30 Aug 2009 18:49:03 +0000 http://www.cdixon.org/?p=452#comment-1786 Totally. Imagine them briefing their LPs at a yearly update meeting with the powerpoint slide "how your money makes us think we are smart and why we act disrespectfully as a result"... It strikes me that no sane person would willingly have their LPs know that they do that and yet these kinds of things tend to be the rule rather than the exception. It would serve these folks well to remember that just like entrepreneurs, the majority of them won't be doing this in 10 years. The long term success rate on VCs is low though mgmt fees can make it somewhat lucrative - and certainly low risk - regardless. Totally. Imagine them briefing their LPs at a yearly update meeting with the powerpoint slide “how your money makes us think we are smart and why we act disrespectfully as a result”… It strikes me that no sane person would willingly have their LPs know that they do that and yet these kinds of things tend to be the rule rather than the exception. It would serve these folks well to remember that just like entrepreneurs, the majority of them won’t be doing this in 10 years. The long term success rate on VCs is low though mgmt fees can make it somewhat lucrative – and certainly low risk – regardless.

]]> By: chris http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1785 chris Sun, 30 Aug 2009 18:41:03 +0000 http://www.cdixon.org/?p=452#comment-1785 Hi Elie- Yeah, I agree it's a really bad long term strategy. I think maybe controlling 100's of millions of dollars just goes to some people's heads...? Bain guys have always been respectful to me and my friends' companies. Hi Elie- Yeah, I agree it’s a really bad long term strategy. I think maybe controlling 100′s of millions of dollars just goes to some people’s heads…?

Bain guys have always been respectful to me and my friends’ companies.

]]> By: Elie Seidman http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1783 Elie Seidman Sun, 30 Aug 2009 18:01:38 +0000 http://www.cdixon.org/?p=452#comment-1783 Had the same thing happen to me at a very reputable firm in Boston. The guys were more interested in hearing themselves speak than in actually listening or acting respectfully. I never understand why VCs act that way even if they don't like the idea. Do they forget that entrepreneurs sometimes actually do become successful and that they don't ever forget these things? why burn bridges that way? if the entrepreneur is in front of the partnership to begin with, it's not likely they are a moron. It's more likely that the VC - who has spent about zero minutes thinking about the specific issue in question - is clueless. Even if the entrepreneur is not working on an idea you are interested in investing in, maybe one day he will be? or maybe one day he will be the sibling or best friend of someone who is sitting on top of the next Google. My current investors - Bain Capital Ventures - really gets that. They passed on the opportunity to invest in my previous company but we always stayed on good terms. It was costless investment for them and a good decision. As for VCs who don't do their homework and socialize the deal internally prior to the entrepreneur showing up - they are being disrespectful and worse, wasting not only the entrepreneurs time but also their own. That's not a good long term strategy and if you observe a firm doing it, try to find a way to short it. I worked for a period of time for Jon Farber who runs the very successful Lime Rock Partners (an energy focused private equity fund). One of the first things he ever said to me was "our reputational capital is precious - don't waste it. Pissing people off is never accretive." Had the same thing happen to me at a very reputable firm in Boston. The guys were more interested in hearing themselves speak than in actually listening or acting respectfully. I never understand why VCs act that way even if they don’t like the idea. Do they forget that entrepreneurs sometimes actually do become successful and that they don’t ever forget these things? why burn bridges that way? if the entrepreneur is in front of the partnership to begin with, it’s not likely they are a moron. It’s more likely that the VC – who has spent about zero minutes thinking about the specific issue in question – is clueless. Even if the entrepreneur is not working on an idea you are interested in investing in, maybe one day he will be? or maybe one day he will be the sibling or best friend of someone who is sitting on top of the next Google. My current investors – Bain Capital Ventures – really gets that. They passed on the opportunity to invest in my previous company but we always stayed on good terms. It was costless investment for them and a good decision.

As for VCs who don’t do their homework and socialize the deal internally prior to the entrepreneur showing up – they are being disrespectful and worse, wasting not only the entrepreneurs time but also their own. That’s not a good long term strategy and if you observe a firm doing it, try to find a way to short it.

I worked for a period of time for Jon Farber who runs the very successful Lime Rock Partners (an energy focused private equity fund). One of the first things he ever said to me was “our reputational capital is precious – don’t waste it. Pissing people off is never accretive.”

]]> By: Pitching the VC partnership | Igniting Startups - nPost http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1736 Pitching the VC partnership | Igniting Startups - nPost Sat, 29 Aug 2009 20:08:27 +0000 http://www.cdixon.org/?p=452#comment-1736 [...] From cdixon.org [...] [...] From cdixon.org [...]

]]> By: Dharmesh Shah http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1711 Dharmesh Shah Sat, 29 Aug 2009 07:36:11 +0000 http://www.cdixon.org/?p=452#comment-1711 Nice article. One additional point: When pitching the partnership, it's helpful to do some homework and know which of the partners are in your sector (in a large fund, there might be software partners, media partners, life sciences partners, etc.) Nice article.

One additional point: When pitching the partnership, it’s helpful to do some homework and know which of the partners are in your sector (in a large fund, there might be software partners, media partners, life sciences partners, etc.)

]]> By: Twitter Trackbacks for cdixon.org / Pitching the VC partnership [cdixon.org] on Topsy.com http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1706 Twitter Trackbacks for cdixon.org / Pitching the VC partnership [cdixon.org] on Topsy.com Sat, 29 Aug 2009 02:35:31 +0000 http://www.cdixon.org/?p=452#comment-1706 [...] First Tweet 1 day ago cdixon chris dixon Highly Influential Pitching the VC partnership http://www.cdixon.org/?p=452 view retweet [...] [...] First Tweet 1 day ago cdixon chris dixon Highly Influential Pitching the VC partnership http://www.cdixon.org/?p=452 view retweet [...]

]]> By: David http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1695 David Fri, 28 Aug 2009 20:37:25 +0000 http://www.cdixon.org/?p=452#comment-1695 Great post, Chris. Keep them coming. Great post, Chris. Keep them coming.

]]> By: Stan Oleynik http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1686 Stan Oleynik Fri, 28 Aug 2009 17:50:55 +0000 http://www.cdixon.org/?p=452#comment-1686 Got it. Thanks! Got it. Thanks!

]]> By: Scott http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1678 Scott Fri, 28 Aug 2009 15:27:01 +0000 http://www.cdixon.org/?p=452#comment-1678 Re: "The current early-stage VC process is optimized to favor people who are good at pitching partnerships, not necessarily people good at creating successful startups." Brilliant and (tragically) accurate. Great to see someone come out and say this as succinctly. Great post. Thanks for writing it. Re: “The current early-stage VC process is optimized to favor people who are good at pitching partnerships, not necessarily people good at creating successful startups.”

Brilliant and (tragically) accurate. Great to see someone come out and say this as succinctly.

Great post. Thanks for writing it.

]]> By: chris http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1669 chris Fri, 28 Aug 2009 12:55:49 +0000 http://www.cdixon.org/?p=452#comment-1669 At the early stage, no one takes financial projections seriously, but you should do them just to show you've thought it through. At the early stage, no one takes financial projections seriously, but you should do them just to show you’ve thought it through.

]]> By: Stan Oleynik http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1622 Stan Oleynik Thu, 27 Aug 2009 20:55:23 +0000 http://www.cdixon.org/?p=452#comment-1622 Chris, Are business plans with financial projections and plans mandatory, when pitching to VC's? What about when pitching to angels? The reason I'm asking is because I will need to raise some capital for my start-up in the near future, and I'm not sure how to go about the whole how-will-my-company-make-money thing in the business plan, especially considering the fact that I'm more focused on building a great product first and figuring out the best monetization opportunity later... Please advise what I should do, in this situation! Thanks, Stan Chris,

Are business plans with financial projections and plans mandatory, when pitching to VC’s? What about when pitching to angels? The reason I’m asking is because I will need to raise some capital for my start-up in the near future, and I’m not sure how to go about the whole how-will-my-company-make-money thing in the business plan, especially considering the fact that I’m more focused on building a great product first and figuring out the best monetization opportunity later…

Please advise what I should do, in this situation!

Thanks,

Stan

]]> By: chris http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1621 chris Thu, 27 Aug 2009 19:54:26 +0000 http://www.cdixon.org/?p=452#comment-1621 I feel a little jerkish talking $, but I will say it was >10x for VCs (and the amount is publicly available). I feel a little jerkish talking $, but I will say it was >10x for VCs (and the amount is publicly available).

]]> By: Stephen http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1620 Stephen Thu, 27 Aug 2009 19:51:56 +0000 http://www.cdixon.org/?p=452#comment-1620 Hey Chris, love the nuggets of gold on how to pitch to a VC. How much did SiteAdviser sell for? Hey Chris, love the nuggets of gold on how to pitch to a VC.

How much did SiteAdviser sell for?

]]> By: Aaron http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1617 Aaron Thu, 27 Aug 2009 18:18:04 +0000 http://www.cdixon.org/?p=452#comment-1617 Chris - it looks like you're on Wordpress and after I installed Disqus on a Saturday, I went into advanced settings and clicked import comments. Took about 4-5 hours but they came over perfectly. Great blog, btw -- it's become a must-read for me. Chris – it looks like you’re on WordPress and after I installed Disqus on a Saturday, I went into advanced settings and clicked import comments. Took about 4-5 hours but they came over perfectly.

Great blog, btw — it’s become a must-read for me.

]]> By: Ro Gupta http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1614 Ro Gupta Thu, 27 Aug 2009 17:53:20 +0000 http://www.cdixon.org/?p=452#comment-1614 Re: Disqus, yes Chris the WP plug-in should help you w/ the import. Can get to it by following steps at disqus.com. It's also here: http://wordpress.org/extend/plugins/disqus-comment-system/. If you're having any trouble, feel free to ping me: ro at disqus dotcom. Thanks, Sean, for suggesting :) Re: Disqus, yes Chris the WP plug-in should help you w/ the import. Can get to it by following steps at disqus.com. It’s also here: http://wordpress.org/extend/plugins/disqus-comment-system/. If you’re having any trouble, feel free to ping me: ro at disqus dotcom. Thanks, Sean, for suggesting :)

]]> By: Ouriel Ohayon http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1613 Ouriel Ohayon Thu, 27 Aug 2009 17:18:19 +0000 http://www.cdixon.org/?p=452#comment-1613 Thanks for those great posts chris. I think i learned more here on the VC world than by practicing 3.5 years. You just made the top of my VC blogroll Thanks for those great posts chris. I think i learned more here on the VC world than by practicing 3.5 years. You just made the top of my VC blogroll

]]> By: chris http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1612 chris Thu, 27 Aug 2009 17:18:16 +0000 http://www.cdixon.org/?p=452#comment-1612 disqus - I tried! It seemed to remove all my old comments. Is there an easy way to import them? disqus – I tried! It seemed to remove all my old comments. Is there an easy way to import them?

]]> By: Sean http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1611 Sean Thu, 27 Aug 2009 17:16:46 +0000 http://www.cdixon.org/?p=452#comment-1611 ps would be great if you installed Disqus on your blog. ;) ps would be great if you installed Disqus on your blog. ;)

]]> By: Sean http://cdixon.org/2009/08/27/pitching-the-vc-partnership/comment-page-1/#comment-1610 Sean Thu, 27 Aug 2009 17:16:18 +0000 http://www.cdixon.org/?p=452#comment-1610 Investing, trading - what ever the asset - by committee/consensus is a recipe for disaster imo. You get a lot of bloody camels... While its good / valuable to have a panel of peers to poke holes / question your trade(s), ultimately one person has to make the call and live with it I think. This would also mitigate the risks you outline here (ie only rarely would the partners get the 'owner' of the investment to change his/her mind and the 'owner' bringing the trade to the partnership would be extra damn sure this was a deal he wanted to do to avoid insofar as possible needing to make an about-face post his partners' comments.) Investing, trading – what ever the asset – by committee/consensus is a recipe for disaster imo. You get a lot of bloody camels…
While its good / valuable to have a panel of peers to poke holes / question your trade(s), ultimately one person has to make the call and live with it I think. This would also mitigate the risks you outline here (ie only rarely would the partners get the ‘owner’ of the investment to change his/her mind and the ‘owner’ bringing the trade to the partnership would be extra damn sure this was a deal he wanted to do to avoid insofar as possible needing to make an about-face post his partners’ comments.)

]]>