“If you don’t know that, then I know more about this market than you do. And that’s a problem.”
I sat in the audience at a demo day in New York last year, cringing big time. A VC was criticizing a founder onstage, and I had had about enough.
The young founder had just pitched his company, an early stage healthcare startup.
The VC was the judge. But he wasn’t just judging this founder’s pitch — he was browbeating him.
I actually thought the pitch was pretty good. But the VC claimed to have some familiarity with the market, and was convinced this young entrepreneur knew nothing.
Lately, I’ve been thinking about this incident a lot. It got me thinking about how founders and investors get along…
Time and again, I see investors acting as if they’re above founders. Smarter, wiser, and of course richer.
These investors don’t understand what their job is. Their job isn’t to tear people down — it’s to cooperate with them and build something big!
Perhaps the VC did know more about this market than the founder.
Great! Help him out, and give him some useful ideas!
But there are nicer ways to do it. The VC could’ve said something like “Hey, I used to work in this area, have you thought of doing X? I’ve seen it work well for other companies.”
At that point, they’re having a conversation, rather than an auto da fé.
And let’s not forget the truth that investors love to hide from.
The founder is in this business every day. We’re parachuting in for a few minutes.
We don’t know much about it!
The best we can do is help you think through some problems and offer a couple of ideas we’ve seen work. We shouldn’t act like we know all the answers, because we don’t.
If an investor does need to have a more frank, difficult conversation with a founder, okay. Do it in private.
Don’t do it on a stage in New York City in front of 50 people.
I’m all for asking founders tough questions. Anyone who’s met with me will probably tell you that I asked them for tons of details.
And yes, in the end, I’ll be passing on most of these companies. That’s the business we’re in.
But there’s a way to do that without being a jerk.
That’s what I’m aiming for. And if I fall short, please, let me know so I can correct it.
What do you want to see from investors, and what don’t you want to see? Leave a comment and let us know!
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