
Ask HN: How widespread are these VC shenanigans? - igorlev
I&#x27;m a co-founder at a small NYC startup and, as is usual, sometimes random VCs reach out to chat or ask questions. Most of the time I either ignore or have a short conversation.<p>A few months ago, a relatively well known (though not huge) west coast firm reached out and based on their brand I answered and had a short and cordial chat. They seemed pretty helpful and at the end asked if there were any types of customers we were interested in connecting with. They followed up with an introduction to a (real, well known) company that fit our profile and I had a decent, though, in retrospect somewhat peculiar, conversation with someone who worked there (verified through LinkedIn and company email address) and was looking to address a problem that our product solves. Nothing came out of that lead and I quickly forgot about it.<p>A few days ago I realized that the potential customer I was speaking with was actually a buddy of someone at the VC firm and left their job to start a company that&#x27;s pretty much doing the same thing we are. Not only that, but in retrospect, their questions now seem clearly designed to try and understand some of the unique propositions of our product.<p>Now I know that VCs will often take meetings just to ask lots of probing questions for their portfolio companies.<p>My question is, how widespread is this extreme tactic of going as far as offering a fake customer intro just to get deeper information on your product? Do other folks have even worse stories than that?
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xaksis
Yeah, been experiencing the shady VC behavior more and more these days. Being
upfront about not needing capital doesn't help as they continue to want to
chat and contact you on every channel. Once you agree, it quickly turns into
uncomfortable probing questions about financials and validation methods.

The reason becomes quite clear if you look at their portfolio. If there are
companies like yours there, it makes a lot of sense as to why they want to
know what's working with yours. They haven't invested in you, but they have in
these other companies.

Almost every founder I've talked to has a story like this and warns against
taking investor meetings/chats unless you're actively looking for funding and
have done your research. Better yet, only follow through on warm introductions
from other founders/people you know.

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relaunched
Shenanigans happen all the time. This is just one of many stories.

However, your ability to execute is the only thing that matters. This thing,
whatever it was, isn't going to make or break your business. More importantly,
it validates your space.

Move on and be a little more discerning and specific about what speculate
meetings you take; maybe by filtering by who the person asking for the favor
is - though it's shitty that it's positioned as a potential customer.

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ian0
In my anecdotal experience this is relatively common in SEA too. Not as
convoluted as your case, but basic things like (a) collecting information to
pass back to a portfolio company they have forgot to disclose or (b) digging
for information on competitors on behalf of a founder-friend.

Note its not as if secrets make or break startups in general, so its not a
very smart move considering the VC risks reputation damage. And reputational
damage is real. The founders doing the best have the most amount of choice and
will discount a VC another founder warns them against.

So Id imagine a lot of cases are either junior guys who dont know the ropes,
or "semi-honest" things like inadvertently giving hints as to what areas a
competitor should look at. They do meet with a lot of companies and learn from
them, all that info wont be locked in a vault.

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duxup
I wonder what they would say if you asked:

"Why do you want to put me in contact with customers?"

It doesn't seem like a VC would cold call just to connect some rando startup
with a customer for no apparent reason.

Granted a more casual meeting about something else it might make sense "Hey I
know a guy who wants a thing you have." but a cold call like that seems
strange.

~~~
igorlev
That part is not as weird as it seems. It's not unheard of for VCs who are
looking to maintain a relationship with a startup to provide an introduction
even before investing as a gesture of good faith. Also, to clarify, the call
was just a regular VC chat, the customer intro came later.

Granted that's usually the case when there's a competitive fundraising round
that's coming up but it still not completely crazy.

~~~
notahacker
Also, if the person in their network they're offering the introduction to is
_actually_ a prospective customer, it's a useful way for them to validate a
startup's value proposition to the end user.

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planetzero
This tactic is used a lot. Especially by large companies looking for free info
about a market they want to enter.

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muzani
Unlikely, and it sounds like a misunderstanding.

1\. There's little tactical advantage from doing something like this. Startups
live and die often by lack of demand, not from competitors. Industrial
espionage exists, sure, but it makes little sense to spy on a competitor
instead of just investing in them.

2\. It's harder for VCs to find good companies to invest in than for good
companies to find VCs. Word spreads fast (this thread is an example). Shady
VCs will get figured out. Since VC is usually a long game, it's counter-
productive, unless it's some kind of social engineering in the first place.

3\. There's a lot of overlap with new ideas. One of my consulting clients was
an experienced entrepreneur, mentor, startup judge. On one of his mentoring
sessions, a startup came up with the same idea. We had been building it for a
while, so no idea was stolen, and he even poked fun at the team that seemed to
be worse at implementing the idea, but he didn't disclose that he was working
on the same thing.

4\. The goal of a VC meeting would be trying to understand the unique
proposition of your product (as well as team and market size).

