Part of the process I’m in now with my new company (more on what we do in another post later) is that I’m always in contact with potential customers, companies, competitors and investors about our plans. I feel it’s important to share our strategy and possibly receive valuable feedback on it from different angles. VC’s are an interesting breed in this.
I’ve noticed that VC’s all seem to take a different stance on the process. There are those that make it difficult for you to get into a real meeting with them. Asking tough questions up front, not providing much information themselves. Those are the easy ones. If investing a tiny bit of time to talk is too much, then you’re not the investor I’m looking for. This is completely opposite from practice a few years ago. There is definitely more awareness with founders and investors that the power in their relationship needs balance for it to work.
There are those that gladly invite you to a first meeting simply because you ask them. In most cases I suspect it’s because they know me and have seen the things I’ve done in the past. A natural curiosity ‘what’s he up too this time’. Such meetings are always great. You are bound to receive honest feedback and possibly more if needed.
And today I received a message from a high-profile investor I contacted earlier this week and highly respect (Not gonna tell you who, figure that one out for yourself). He turned down my request to meet up because he’s invested in a possible competitor that is trying to accomplish something similar to our strategy. His words, ‘Probably too close for your comfort or mine’. I thought about that for a while and felt that was a pretty amazing response.
He could have done at least one of 3 things.
a. Ignore my request
b. Set up a meeting without explaining that he’d already invested in a possible competitor and then learn more about our strategy
c. Do the decent thing and decline with an explanation why
By choosing option c) he accomplished several things with me. First of all, he gained a huge amount of respect (which he already had) for being direct and open about his choice not to meet up. He chose not to discuss our strategy with me, I assume because he doesn’t want to get into a position where he could learn things from us that could benefit his investment (or vice versa). That’s an interesting choice for someone making his living with investments in companies like ours. I find that very honest and to me that proves that this investor is a decent person.
As a result of this I already know that I could easily trust such an investor. I will continue and try to build a great company, and I’m sure we will encounter this investor and the possible competitor again. I’m sure that as of today they will be watching us too, which is a good thing imo. Who knows, at some point there could be valid reasons to see if we could strengthen each other.
Today I’ve seen something that is important to me in the startup world. Not all investors are in it for the short-term win. If you ever get into a position that you can pick an investor to work with, then look for those qualities. There are lots of things you might be looking for in an investor, besides money. And being honest, straightforward and decent are definitely trustworthy characteristics.