

Behind the scenes of a seed round - hippo33
http://hippoland.tumblr.com/post/29555433091/part-1-behind-the-scenes-of-a-seed-round

======
crazygringo
> _He said, “I don’t want to say the wrong thing and call you a “meek Asian
> woman”, but I wonder how you’ll lead a company of 100 people.”_

So much about investing, VC's claim, is investing "in the team", and trying to
figure out "what kind of people" the founders are.

After all, you're not being hired for a well-defined position -- your success
may depend on your very character as a human being. Your drive, your
persistence, and your ability to inspire others.

But since these things can't ever be objectively measured, there's tons of
opportunity for stereotypes (conscious and unconscious) to affect the process.

There's a positive side to going with your "gut instinct", and a negative side
as well.

~~~
danshapiro
As sickening as comments like his are, there's some comfort that it identifies
the people you shouldn't waste time with. The only thing worse than a loud
bigot is a silent bigot.

I only wish that I could get this information as well so that I could avoid
investors with such poor decision making skills. But naming and shaming isn't
in your or your company's best interest, so I can't argue with your decision
to keep the person's name to yourself.

Perhaps an anonymous post to TheFunded?

~~~
hippo33
Agree!

I doubt you'll run into this person. He isn't well known and hasn't even made
his first angel investment yet. (that in itself should probably have been a
clue for me to not waste my time with him...)

------
polyfractal
This part was really surprising to me - definitely one of those things you
don't learn until you try it yourself:

 _> I soon learned that lots of investors liked to reschedule meetings at the
last minute to meet with other seemingly “hotter” entrepreneurs. Having a full
pipeline gave me leverage to say, “Well, we can move our meeting, but my
schedule is so booked — I don’t know if our round will still be open by the
rescheduled date.” This ultimately caused some investors to un-cancel our
meetings._

~~~
patio11
There's also some high-school-with-more-money-attached gamesmanship with that
sort of thing.

Generic business lesson, not specific to raising funding: you may be
occasionally asked to reschedule a meeting on very short notice, sometimes to
a time which could not possibly be convenient. This is occasional used as a
test: if you say yes, you're communicating that you _really want this deal_ to
go through, which means your other options are likely poor. That can then get
used against you in negotiations. If, on the other hand, you say "We can't
reschedule", you _may_ find that scheduling conflicts resolve themselves as if
by magic.

 _Having a full pipeline gave me leverage to say_

n.b. Truthfully conveying to investors/clients/etc that the market
circumstances concerning one's availability can quickly change in a fashion
against their interests and that as a consequence they should decide quickly
does not require any particular state of one's pipeline.

~~~
grey-area
Interesting that so much of negotation comes down to brinkmanship and
confidence.

 _n.b. Truthfully conveying to investors/clients/etc that the market
circumstances concerning one's availability can quickly change in a fashion
against their interests and that as a consequence they should decide quickly
does not require any particular state of one's pipeline._

Saying 'We _might_ not be available next week' as you do above is not as
convincing as saying 'We have 10 meetings this week with potential investors,
and we have a closing date of next Tuesday when we'll decide who to go with'
or something similar, if that is a truth which they can then confirm with
other contacts. I imagine the more truthful and specific you can be about
having interest the more convincing it is going to be as a reason for them to
be interested.

~~~
BerislavLopac
_Interesting that so much of negotation comes down to brinkmanship and
confidence._

This is pretty much true for every social interaction.

------
gsibble
Great article and sounds very similar to my experiences. Raising capital is
hard work with very long hours and no guarantee of success. It's also requires
a tremendous amount of strategy and gamesmanship (such as the "Well our round
might not be open by then").

Overall, I hate the experience. Will always try to avoid it at all costs.

------
AYBABTME
I'm genuinely interested in this whole process of creating a company and
getting funds and stuff. Where could I find some resources on equity/angel
investor/VC/seeding and all those buzz words I see here. I'd really like to
understand this process better.

Oh and, nice blog post! I'm looking forward to read the next part!

~~~
mindcrime
<http://www.venturehacks.com> is a good resource. There are a number of good
books on the topic as well. And there's a lot of good info on Quora. And, of
course, search the historical posts here at HN, there's a TON of good stuff
here.

BUT... be aware, fundraising is only one aspect of creating a company, and not
all companies even want/need to raise outside funding, and of those that do,
not all need institutional funding. If you decide to launch something, make
sure your focus is on creating something that creates value and has a valid
business model... don't just focus on "how do we raise VC money"?

------
jchung
The Meek Asian Woman comment is outrageous.

~~~
davemc500hats
perhaps, but also useful information... much better that the person said it,
rather than think it and _not_ let her know.

at least now she has information to process about that pattern of interaction
behavior.

~~~
refurb
I agree. Maybe not the best choice of words, but it's useful information.

I'm actually impressed by her response. It wasn't to go out and complain about
his comment, it was to analyze it and see if it was something useful she could
use.

If not, discard. If useful, act on it.

She's not letting a crappy comment slow her down.

------
dm8
I'm curious to know how do investors judge whether given founder has strong or
weak personality? Especially in 30-60 minutes meeting? I'm sure it must be gut
feeling but good salesman can easily fake it, unlike most of the founders who
are geeks.

~~~
jchin
I'm not an investor but I would imagine the answer is in pattern matching.
Investors who meet a ton of people inevitably will have longer relationships
with some of them and find out in the end whether a founder has a "strong" or
"weak" personality.

I think it's reasonable to call this pattern matching a "gut feeling."
Eventually, with more data points, I would assume the pattern matching becomes
more nuanced and would be able to better distinguish who is faking and who
isn't.

