Imagine you're going to an important business meeting to discuss a new partnership, and you're dressed with short pants, a t-shirt and flipflops. Showing up to a meeting with the wrong clothes does not guarantee you will fail to achieve your goals; it's certainly possible you will convince the potential partner about your technology and the benefits and that it will all end well. But I think it's clear that you're making it much harder on yourself.
One of my portfolio companies recently asked me a seemingly simple question; they are raising a funding round and received two proposals, one being substantially higher than the other. They thought it was an easy decision: take the free money, right? Not so fast. My answer to them wasn't what they expected to hear.
Jack Welch is probably the most respected manager of my generation. He spent 40 years in General Electric (GE), half of that as the company's CEO, and brought GE to be one of the largest, powerful and most respectable companies in the world. Jack Welch is one of the smartest managers in the world, but I'm quite sure he will make an awful startup mentor.
There's a common misconception among startup founders of what investors really can do. Many founders expect the investor to be a part of the startup; after all, the investor will have a chunk of the business (so they are legally a partner in the business) and often has contacts, business skills and experience – at the very least the investor can share his experience from watching many other startups and seeing what is working for them – and you would think investors would actively share this with the startup.
Lets take an average meeting between a startup and a VC. It could be a pitching session or a one-on-one meeting. The meeting ends, and the startup is waiting for feedback. What are the chances the VC will say yes? Probably one in 10, maybe lower. So does that mean the startup will hear 9 “no” answers for every one “yes”? Nope.
Most startup founders have the wrong idea on why their startup might die. They usually think their death will come from a competitor developing a similar product and stealing away market share; or from a patent lawsuit; or by employees suddenly quiting and moving to another company. This is also the major focus of most founders: how is our competition doing? What is our legal status? How happy are our employees?
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