Being ghosted is never fun. Especially if you are the founder who seeks capital from investors.
This is similar to dating. You might be wondering “Why is this person not back to me? Am I doing something wrong?” Do investors hate this product? Do they personally care about me? ” It’s enough to drive anyone crazy.
Ghosting is an undeniable signal of lack of interest. If VCs want to invest, they will definitely respond to your phone number or contact you after the court.
According to several VCs who spoke with TechCrunch, the founders thought they would agree to a meeting, or worse, there are multiple reasons why the VC might disappear.
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Mercedes Bent, partner at Lightspeed Venture Partners LinkedIn Posts A topic about the popular VC ghost. VCs will naturally spend more on founders and startups they see potential.
“Writing a thoughtful rejection takes effort when the pass doesn’t ‘convert’ [to an investment]it is often deprived. Not that it’s good,” she wrote in a LinkedIn post.
Bente also noted that the investment environment has changed over the past decade, so venture capitalists must make decisions faster and therefore have less time to recover potential customers.
“Visit investors are irritating at a startling rate – more companies, more capital, more courts,” she wrote. “Just focus on quantity and speed, there is little room for the intention and personal style that has ever defined the industry.”
She added that this rapid growth has created a culture of burning and burning where relationships are growing.
“Tomorrow’s Better Ventures Co-founder and General Partner Sheel Mohnot” said things usually slip through the cracks when he’s “super submerged”.
“It has nothing to do with the founder, it’s always about what’s going on in my life, like we’re raising funds, or the founder camp, our annual shareholder meeting, 2020 currency, etc.,” he told TechCrunch.
Eric Bahn, co-founder and general partner of Hustle Fund, relies on automated email responses to help him manage the influx of inbound trading opportunities he gets in his inbox. He estimates he receives about 30 inbound stadiums a day.
“I have a permanent Off Office email mail setup that will respond to every message with instructions on how the founders interact with our investment team through our website forms,” he told TechCrunch. “Our team takes all submissions seriously, but I can’t respond to every email tender as much as possible.”
Now, if he had already met with the founder, Bane claimed he would “never ghost.”
“When I have to pass the deal, I will explain why I’m going to pass and share some feedback,” he said. “It’s a simple etiquette and I hope more VCs can do more stably, too.”
Red flags that will lead to rejection
Ironically, an investor who hopes not to be named AI Generation, Cold Outreach, told TechCrunch: “It’s so much that it drowns out all the real outreach. I can say it’s AI Generation because I’ve got dozens of structures that are the same, but different words and there’s always some weird inaccuracy. It just uses all the written publicity as a channel to reach new people.”
So while VCs may like to support AI startups these days, many of them write emails, but they don’t want to be on the receiving end.
“Ultimately, we’ll just filter any emails from unknown senders because it could be AI-generated messages,” she added. “So to meet new people, you actually need to meet them socially (warm introduction or in person). Go back to the age of the stone!”
One thing that really annoys Bane is the lack of self-awareness. For example, don’t try to claim that your startup has no competitors or faces no risks that exist.
Bahn usually asks founders on a court, which can kill their business. The shocking founder will respond: Nothing.
“Anyone with a simple self-awareness knows it’s definitely not true,” he said. “So many things can threaten their business: competitors are going to perform better; face a market with new compliance or regulations; a new pandemic.”
As a potential investor, Bahn wants to know that you not only see risks, but also plan to mitigate them. “As the legend’s CEO, Intel’s Andy Grove once said: Only paranoids can survive,” he said.
Mohnot said that if the founder couldn’t explain how to grow the business beyond the original concept, he would notice. But the opposite is true: unrealistic expectations are a red flag that points to him being shut down by the founders who claim their startup will “immediately destroy the entire industry” or project “very optimistic financial forecasts without solid evidence.”
Other things he found were a dot: obvious tension or lack of supplementary skills among founding team members, suggesting potential collaboration issues; lack of technical depth or overemphasizing fundraising rather than “building sustainable, valuable businesses.”
Rex Salisbury, founder and general partner of Cambrian Ventures and former partner of Andreessen Horowitz (A16Z), wants to see the founder where it matters most. He considered the pitch deck as a six-month-old document name as a red flag. However, the numbers of false statements will take you completely out of Salisbury.
Founder behavior
There are other actions that will end your conversation with VCS. For Bahn, if the founders say racist or sexist, they will be cut off.
“In fact, a founder once called the founder of competition the C word before me,” he shared. “I wouldn’t tolerate working with people who have such respect for others for the next decade.”
Founders should also remember that even if investors reject them now, they may consider working with them later. Therefore, disrespect when rejected can kill any chance and may also lead to VCs never talking to the founder again.
Sometimes his company refuses to provide detailed feedback, and the founder will “turn around and call you your name or even threaten you”, Barn said. He noticed that it happened to his female colleagues rather than to himself.
“I’m grateful when these moments happen, which means we made the right choice not to work with this founder,” Barn told TechCrunch.
“That person is also blacklisted – we won’t respond to that person anymore and the interaction will be recorded in our internal database so that our institutions can avoid them forever,” Barn added.
Naturally, all venture capitalists say dishonesty is the killer of trading immediately. Addie Lerner Katz, founder and managing partner of Avid Ventures, notes that dishonesty can happen in all forms, including exaggeration and lack of transparency.
She was also shut down when the founder spoke to current or past investors or colleagues. Negative reference calls are another reason for Lerner Katz’s pause.
“In these reservoirs, we take ‘yellow flags’ very seriously and generally think they are not qualified,” she told TechCrunch.
Mohnot recalls an incident where the founder lied about a deal with another startup. Another startup happens to be in Mohnot’s portfolio “so quick texts put together one.”
However, overall, indicators, team capabilities, market size or technical performance are also often easily exposed to VCs.
“It happens more often than you think,” Monot said.
All venture capitalists still believe that if they actually had an advocacy meeting with the founder, there is no real excuse to send a simple “no thank you” follow-up to the founder. As Bent said, ghosts will happen anyway.
“I’m not saying that these are all good reasons. It’s reality. It’s the game,” she wrote.
However, given the poor risk of venture capital that stops talking to you, she also recommends that the golden rule applies to both parties. “How do people want to treat them.”
