VC POV

I’ve had the good fortune to be an investor for almost 15 years and have backed 100s of startups. Only one company in all that time deliberately defrauded its VCs.

One argument I hear in favor of big $$$ fundraising is that it will help in recruiting. It’s a logical enough belief but mistaken. It assumes there’s a linear relationship between the amount of funding raised and caliber of recruits.

I have the great privilege of seeing a lot of startup pitch decks and have noticed a few common narrative patterns that are counterproductive for otherwise interesting companies. If you’re getting ready to pitch a VC, try to avoid these traps.

In my role at a VC firm, I have the privilege of seeing the pitch decks of startups as they set out to raise new funding. In the main, they’re masterful, but I’ve seen a lot of founders making a similar mistake—including quotes from random users in their presentations.

In a world where IPOs are an unlikely outcome and traditional M&A exits are difficult to manufacture, there is a new alternative for liquidity starved founders and investors — The PE exit. It’s an invisible ecosystem to most, but when you see a headline about a PE firm making an “investment” in a mature SaaS startup, and there is no mention of valuation, or even what series it represents, you’re most likely witnessing an acquisition, of sorts.