The blogs and twitters of prominent angels and early-stage VCs around the country point up the contrast between the old-school, opaque nature of entrepreneur-investor relations, and the kind of relationship-building that’s leading to successful fundings with fewer surprises.
I singled out Union Square Ventures‘s Fred Wilson in my last post as the archetype of the new early stage VC. Others are blazing the trails as well.
The old-school meetings with VCs were just that (actually, more like going to the principal’s office.) I remember heading weak-kneed into the Sand Hill Road offices of Institutional Venture Partners, Mohr Davidow Ventures, and others, ushered into a gorgeously appointed conference room (usually by a gorgeously appointed receptionist), setting up, waiting. Neatening up our stacks of business cards. Waiting. Sometimes treated with dignity, other times . . . not so kindly. Sometimes assaulted with questions . . . sometimes no questions. Then, getting neither a yes nor a no, following up with interminable emails to determine interest.
I mean, what was that all about?
Not all meetings went that way. There was an occasional quick ‘no’ which was always appreciated, especially with a reasonable explanation. (Although the old saw goes: “Whatever reason you were given for a ‘pass’ is never the real reason.”)
But the trailblazers are taking a different tack: “Heading to ShakeShack for lunch . . . Line is short,” Wilson twitters. “Going to OpenCoffee Cambridge this morning. Everyone welcome. Join if you can,” tweets a Boston VC. “Talking about database issues.” Could it be we’re headed towards a brave, new world, where lions really do lie down with lambs?
Well, OpenCoffee Cambridge was launched by a VC and an entrepreneur.
It bespeaks a wholly different process. Instead of ‘buzz’ around a hot new startup with VCs positioning to get in on the deal, there’s a gestation. Foundry Group‘s, Brad Feld, part of the new breed, blogged about the three-year courtship (okay, maybe it’s an elephant’s gestation) that led to his investment in Gnip, a ‘glue’ application that notifies data consumers (plaxo, lijit, etc.) as new data spews from data producers (digg, flickr, etc.), so as to decrease latency. Disclosure: Technosailor Lead Editor Aaron Brazell consults full time with Lijit, an investment company of Foundry Group.
The point is, Foundry forged (sorry) a relationship that eventually found its way to an investment. This is the new process. And it begins with a dialog, rather than a pitch.
Along those lines, I had two-hour discussion (over beers, no less) with a local VC after he gave me a ‘no.’ Will it remain a ‘no’? I believe there’s a chance to convert it . . . but it would only be once I’ve demonstrated sufficient progress with my app and he’s gotten to know me – or more to the point, my capabilities: overcoming obstacles, building my team, winning customers. In other words, once I’ve sufficiently reduced risk (that VC characteristic will never change).
The trend is towards openness and accessibility, and we need it to happen in DC. Like any of these things, OpenCoffee needs a critical mass, starting with a healthy dose of entrepreneurs. Paul Worsham, who (along with Kady) generously organizes the DC Social Media Meetups, was working on pulling together OpenCoffee, as well . . . but our last one was in May, with few attendees. Last night he graciously invited me to take a stab at it.
I’d be happy to do it – but only if I can anchor it with a VC or two in attendance. I’m serious about this. (Lionhearted VCs, consider this an open invitation) shoot me an email at rcapece at technosailor dot com). I will also do a targeted outreach to local VCs, and will report my progress in a subsequent post.
Let’s get the dialog going.