As part of the fundraising process, I have very little time with the founders before I have to decide whether or not to continue working with them. It often feels like poker. You’re trying to find out if someone has a “tell” that gives you some insight into their character and personality – good, bad, or otherwise, and the same goes for me for founders on the other side of the table.
You don’t learn that much about me before I say yes or no. So I’m very open about what I think and where my incentives are. I think it’s better to just put all of my cards on the table.
That’s why I’m a passport if I catch a founder who, in the fundraising process, bends the truth about someone else’s interest in his company – or if I think he’s trying to blow smoke to move the process forward. If I can’t get a definite answer from you on the current status of the round, prospects, etc., what is the likelihood that I will get a definite answer on the status of the company after my investment?
I also hold a high bar on how someone appears to treat the least influential people on their network.
I was having a discussion with someone recently and a name came up. It was the name of someone who had a negative interaction with a founder I knew.
Because of this interaction, I have clearly controlled other people – and sometimes to the annoyance of others who think I am an alarmist.
This person is well known in their part of the industry and I couldn’t help but feel like the person I spoke to changed their tone when they spoke to this person.
“Hey, when we spoke to X earlier, I felt like you reacted a bit to her name – do you know her well? Was there anything about it? “
It turned out to be something pretty serious – and the fact that I happened to run into two people who had less than excellent business relationships with that person made me feel like a pattern was emerging. I did a permissible intro between the two parties and together they realized they weren’t the only ones getting the short end of the stick.
There are a ton of people out there building a good reputation on social media from scratch, sometimes just out of a willingness to spend every single waking minute of your day in as many clubhouse rooms as you can find, or much and successfully to write growth hacks a newsletter that everyone reads.
Don’t let an audience be the only indicator of a person’s character or ethics, and never let that stop you from confiding in a person you trust if you ever feel like a less than ideal interaction to have with someone.