VC: Entrepreneurial team decides whether to invest

Entrepreneurship for many people with dreams and passion, is not a strange word, and now, a large number of entrepreneurial team emerged, giving investors more choices. So how investors choose the entrepreneurial team is a problem everyone wants to know.

Many VC will say that they chose a company, is actually a fancy to the company's entrepreneurial team. They did not lie when they said the words. But they never talk about the fact that they are working out of a company because of the entrepreneurial team.

Before I became a VC, I was an early entrepreneur myself. So, I know how much time and effort we need to prepare for the project and the company's vision, and I know that an early startup is like the founder's own child. So I know very well, when you try your best to get the favor of VC but in the end it is empty, and they do not give you a clear response, do not tell you what they are thinking, do not tell you why the rejection of your team, is how a feeling of flexion.

So, after I made the VC myself, I was determined to change the status quo. I will respond to all the people who sell to me, and if I end up eliminating them, I will give a clear and concise explanation. Although I can't give them money, I would suggest other ways to help them. And I'm not saying it in my mouth, I really think so.

And almost in the process, I found the Golden Law of VC in the selection of entrepreneurial projects-they are basically looking at the entrepreneurial team. Every time we see a team project show, we will take some time to discuss it immediately. Most of the discussion is about the team, and then we'll talk about products and markets. But in fact, what we're talking about is that we like the founder, and it's probably more subtle than you might think:

Did you see him fidgeting in his chair when he answered the question?

Did you see that he was particularly vague when discussing this particular topic, as if there were still a lot of problems wavering?

He seemed to be a little agitated, and the whole process of financing must have been a bit gaunt.

He seemed to be in despair, and he must have lost faith in the whole business.

Then we decided not to invest in the team, and then we were going to tell the founders we eliminated them.

There is a dilemma: what would you do with a founder if you eliminated a company from a team problem?

I mean, don't you notice that most VC companies targeting early startups talk about the importance of entrepreneurial teams, but they never say that they actually eliminated a company for that reason. Can't you see what's wrong here?

Why is that? I decided to take the risk myself. I told some founders that the reason I didn't want to give them money was the problem. I also told the other founders that the problem was with their co-founder. There are times when I would lie to say that your entire growth drive (traction) is not enough. Then, there are several things that happen:

1 If the problem is the founder of the CEO

When I tell people that they don't have the quality to start a successful company, the conversation is usually filled with gunpowder. When I actually feedback this information to them, I feel that my motives are no more well-meaning. I know that many people now see people like Zuckerberg and then start to think that they can start a business at any age without experience. And then I saw the other side, some people middle-aged, but also to start a mobile-based, localized, social start-up companies, but they do not have the ability to launch a compelling social products. If these people are facing a very large market, the company has a certain growth momentum, the entire product prospects have some hope, but at the same time, we feel that the founder of the company from the beta phase to the next stage, or lack of leadership, or do not have the ability to recruit talented people, The whole problem becomes more difficult and more complicated. At this time, my feedback to those people is not "you are stupid, we can not afford to throw money on you." "I will take a different strategy more often:

"It's hard for you to make VC money for you," he said. Because you didn't have a successful case before, and (give an unrelated reason). "(This is just a warning).

"I think that before you go it alone, you should learn a little experience in a start-up company or incubator," he said. "This is my heartfelt advice to those entrepreneurs who are still in the early stages of the venture."

"I think the entire executive team lacks the basic skills to finance, and you should upgrade the entire financing team as a whole." "It's the best advice I can give for those who have made real progress in their entrepreneurial process, but some of the team really needs to overcome some weaknesses."

But unfortunately, these conversations are not really fun, sometimes they turn sour or even become more of a rival. So I don't do that anymore. Because it's not worth it, and no one wins from this kind of conversation.

2 when the problem is with the co-founder/executor

It usually gets pretty interesting: I've seen two of these. Some founders would thank me so much for telling them. I think the founders have been questioning the founders before, and my feedback confirms their doubts and may point the company to a more correct path. In addition, my sincere feedback further strengthens my relationship with these founders, because I hope to see them again in their next fundraising 12 months from now.

In other cases, the whole conversation becomes ugly and ends the possibility of a long-term relationship with the founders.

3 When I lie. Listen, a lot of VC will do this. But it's actually more like hiding some details than outright cheating. Or they may not want to lie, so they choose not to respond. So if you're working on a project for VC but you're being rejected, but the answers you get are completely out of the question-then it's likely that the real problem is on the team. "We just want to see your stronger growth momentum. "This reason can be said to be the usual use of VC very safe answer, because no one can refute this." So, in the end, there is this embarrassment, on the one hand, I do not want to lie, but on the other hand, the alternative solution is not so good.

So the question is, is there a solution?

I think the solution is still there, but you need to follow the instructions below:

More direct feedback. "Do you have any other feedback for me personally?"

More two-way feedback. VC should also get feedback from the entrepreneur. If you want to sell me a project or you know me, please give me some feedback!

Look at yourself. Defending yourself is easy, but try not to.