Perspectives on entrepreneurship, startups and venture capital from K9 Ventures.

  • Willy Ogorzaly

    thanks for the advice Manu! we had a surprising number of these emails after CBinsights featured us in a post. your advice saved me hours of time.

    to the commenters disagreeing: when firms like Bessemer reach out to us, we gladly take the call. However, when the fund’s minimum check size is $20mm and we’re raising a seed round, it’s a waste of everyone’s time. If the fund invests in startups at your current stage or even the next stage, it is worth it to take the call. If the fund exclusively focuses on companies that are 2 or more stages beyond you, it’s best to follow up a few years down the road (assuming the person that initially contacted you is still with the fund).

  • Palo Alto VC

    As a VC, I generally disagree with most of this post. VCs do lots or research to find interesting companies. Often sending an email is the quickest way to engage with a CEO/meet with a company, or to gauge if there is a potential fit for an investment. I think some sort or response serves the company very well.

  • Terrific picture at the top of the page

  • This is sage advice and makes sense. Thanks for the post. The lack of response almost makes you more intriguing.

  • Jordan Thaeler

    So why do founders need intros while VC’s can just ram their threats into your inbox? Founders need dilutive VCs like they need a kick in the balls. It’s a shit asset class that consistently underperforms equities and treats founders horribly. They prey on engineers who don’t understand finance: derisk your company, take my money, and if you don’t hit these ridiculous expectations that are mostly a function of luck, I own everything. You can ruminate about your pivotal decision to take VC money as you refill your crusty ramekin in the soup line.

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  • John

    This is not contrarian advice. It’s just contrary to what you should do.

  • John

    tl;dr I agree with Phil, this is misinformed and potentially dangerous advice.

    The advice is premised on the quote from WarGames (that the entire post seems to have been backed into from), that the “only winning move is not to play,” but misses the point that this is the case because of game theory, whereby this is the appropriate response because it is the Nash equilibrium or optimal outcome as otherwise both parties lose because playing would cause a global thermonuclear war.

    The Nash Equilibrium for a VC and entrepreneur is that they both find the perfect match to allocate their capital or get funded after meeting with the least amount of VCs/entrepreneurs (and spending the least time doing so). It is therefore in the VC’s best interest to only engage with firms he is truly interested in potentially investing in (aside from bad actors which you can try to screen for).

    For example, if we assume that there are 100 VCs that would seriously consider investing in your company (you’d be lucky to actually get this much interest and then YOU still have to reach them), you receive around 20 cold/inbound emails from VCs mentioned by Manu (count yourself lucky again) and use a rule of thumb conversion ratio for getting a lead term sheet of 1/20, this means there are 5 investors in this universe who would write a lead term sheet, but by knocking out 20 you have lost one potential lead or reduced your odds by 20%, “loosely statistically speaking”. This doesn’t even account for the high probability that inbound interest is likely to have a higher % of potential leads in it than outbound interest and you still have to waist the time reaching out to the other 80 who have have never heard of you who you also don’t know who they are in a universe of hundreds.

    Greetings Manu


    Fundraising is a strange game.

    The only winning move is

    to play

  • Manu says a lot of smart things, but as a partner at a [relatively young] VC firm, I have to agree completely with Phil. I get the meta point of “don’t be fooled by email marketing,” so before a founder tl;dr’s and skips the main part of this post – do your homework before responding to any cold investor (or partner) email.

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  • I used to work as an analyst at Bessemer. We never reached out for market intel, we were comped (as are all people in this sort of role, I believe) on deals sourced. So, I was always trying to find interesting companies to learn about and track.

    While speaking to a non-partner at length isn’t a good idea, making the connection via an analyst can be a very good way into a firm. This person is incentivized to get your deal done! This person has the partner’s ear, and may know how to pitch your company better than you do, and find the right partner within the firm who has appetite for deals, and your type of company/stage.

    Where companies fall down is not realizing when to talk to these sorts of folks. For early stage, it makes no sense. 23 year olds have a hard time understanding what is truly interesting about a company/team even if they were top of their class at Stanford. They won’t present your company to a partner unless it’s directly on a roadmap. In these cases where you’re pre-product/market fit, it’s a waste of time, and I’d say “check back in 6 months, we aren’t raising now.” Or dig to see if this firm invests in your space/stage. Treat it like any cold email you get, try to figure out if it’s worth your time via a quick email exchange. Side note, if you say you’re busy, that doesn’t ding you, it makes you more interesting typically.

    This strategy for VCs is really all about growth equity. So, if you’re a company with compelling unit economics, get on the phone for 20 mins, share the story/why you’re interesting, and then have them do the work of navigating the firm for you. This is a GREAT way into a firm.

    I forget the exact stat but maybe 25% of deals at BVP were sourced via analysts…that’s A LOT considering there were 6 of us and 18 partners.

    No offense, but this post is pretty misinformed (and dangerously wrong advice for entrepreneurs). I’m surprised that you haven’t looked into this more given the strategy has clearly worked for top funds (Accel, Insight, etc), and effects your portfolio.

    • john q. grammarly

      “affects your portfolio”