I distinctly remember one such occasion where I was asked for an MRD, five-year product roadmap, and FCS launch plan by a new board member the day after closing. We had talked to precisely zero customers, mind you — we were just technology at that point. Being just a marketing hack I dutifully put it all together, but I instinctively knew that we were in trouble right then and there. To learn how the rest of the story turned out simply read Chapter One of the Four Steps.

The best public blog reviewing VC firms and specific partners seems to be the website “The Funded.”

steve

To a VC (and the VC’s investors) putting money into a startup and making sure they get the biggest return on their investment is their job. In the end it’s a financial transaction.

To some founders that’s all starting a company may be as well. Grow the pie as large as possible by getting the heck out of the way and bringing in professional management.

But to other founders creating something from scratch and then seeing it all the way through to something used by thousands or millions of people is worth more than money.

There are many founders who would trade a lower price for their company for being able to take the company to the promised land.

That’s why founders are artists and why accountants don’t run startups.

steve

Baloney! You don’t sit there simpering, “I don’t have anyone else to take money from, so I’m just going to smile and thank you for having the grace to get rich off my hard work”! Your potential investor doesn’t know that s/he is the only game in town, so make them work for it. Tell yourself you have plenty of alternatives (mindset is everything) and make them sell you on themselves. Not only will you know better what you’re getting in to, but it sends signals of strength that will help you in your negotiations.

Grill them about their firm, their fund, their partners, their investment strategy. It will make you seem more experienced, less desperate, and generally look like a better investment.

(1) Do the analysis you suggest at the partner level as well as the firm level. A firms reputation doesn’t necessarily map to an individual partner.

(2) When doing this assessment, e.g. if you’re considering taking a VC’s money, don’t rely just on public information, which usually has a selection bias toward favorable. Do comprehensive “reverse due diligence”. Find founders of portfolio companies that are no longer with the company (thank you LinkedIN!)…talk to them and get the real story. I wrote more on reverse due diligence here http://www.altgate.com/blog/2007/11/reverse-due-dil.html

At the same time, you mention “the odds of you being the CEO at this future stage are pretty low.”

If the premise is that early stage CEOs have different skills from those required to scale, then 25% seems high to me. Where does this number come from?

As the CEO, if you are able to acknowledge this weakness, wouldn’t you want a VC with a good track record of successfully replacing CEOs? (No matter if your ego suffers.)