

Ask YC: Is it okay to tell VCs who else you're talking to? - shafqat

Simple question: when talking to a VC, when they ask  if we're talking to others, can I give them specifics? Is that bad form or can it help with leverage? Of course, this assumes we have well-respected investors or VCs who are interested!
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pg
Never simply give them a list of names. But if you're starting to get serious
interest from some VCs, you can convey this in various vague ways to other VCs
to make them interested.

(Never try to fake this. VCs have a lot more practice detecting such lies than
you have making them.)

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shafqat
Thanks.. I wouldn't ever try and fake it. All the interest we have is real (we
haven't gone after funding yet, all the VCs have contacted us) as I mentioned
before, I'd rather not get involved in tactics. Always better to let the
product do the talking. But appreciate the fact that I shouldn't explicitly
give names.

~~~
pg
You should check whether the people from VC firms who've contacted you are
associates or partners. If they're associates, you're no closer to a deal than
if they hadn't contacted you.

~~~
shafqat
Thanks for the tips pg. Of the people we've spoken to, its been a mix of
associates and partners. I guess what you are saying is that none of it really
matters until you get a term sheet. That's fine with us, since we are not
desperate for money. The type of value add we're looking for is
guidance/networks/advice, not monetary.

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timc
so i'm a VC and i don't bother to ask that question. there is no value in
asking that and not a question you want to answer IMHO. Most important is to
get referred into a VC if possible from someone who trusts you and who the VC
knows well. VCs are a lot more frank with a trusted referrer usually than they
are with the entrepreneur and the referrer can signal that the deal is getting
traction. That seems to matter, probably too much, to most VCs.

~~~
shafqat
thanks for the tips. i guess the weird thing about our situation is a lot of
VCs have contacted us. we're super early stage and weren't explicitly looking
for funding. but as a result, we've had some awesome meetings and built some
really good relationships. is it weird for VCs to contact entrepreneurs
directly without referrals?

~~~
rms
How do you think the VCs heard about you to start getting in touch? Are your
private alpha users that influential? That's a pretty good sign.

And can I try your site? I signed up with the email kfischer at gmail

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shafqat
I've worked really hard over the past few months to get the word out. I have a
really active blog, and that helps a lot. Most of the interest has come
through the blog. Leaving thoughtful comments on big blogs, twitter, and
attending open coffees. It all adds up. Rather than focus on the big things,
I've just spent a lot of time doing little things to build the buzz. I don't
think it's our private alpha users - they would not be connected to VCs. Most
VCs have said they stumbled across my blog or the site and liked the vision.

Just sent you an alpha invite.

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langer
I think it depends on how confident you are that the 'other investors' you
mention want to invest.

If they want in, you could be seeding an ego battle which your startup can
leverage to get better terms.

If they don't and start dissing your startup then you could be shooting
yourself in the foot.

~~~
shafqat
I guess we'd rather sit tight and let our product do the talking. The more I
think about it, the better that strategy seems!

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challenjer
Always, always, politely decline from naming another firm. It never does any
good.

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chris_l
I once read somewhere that they will tell each other anyway, because they all
know each other. I don't know if it is bad form to tell them anyway, but bear
in mind that they might know the truth anyway.

~~~
pg
They don't tell each other everything. So while you have to assume that
anything you say to one VC might be told to any other, you can never take it
for granted that it will.

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mattmaroon
They certainly do ask that question 100% of the time. It's definitely not bad
form, but it might be to your disadvantage. They will probably find out anyway
though.

