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The two guys that work with me in Colorado – Chris Wand and Seth Levine – are visiting me in Alaska this week. We started joking about all the ridiculous things we (VCs) say on a regular basis. At the risk of exposing “super secret VC information”, I thought I’d write up a few of these phrases along with what they actually mean.
Oh – and on the topic of “giving away state secrets”, Matt Blumberg has a great post up on How to Negotiate a Term Sheet with a VC. This is a must read for anyone doing a venture financing. Matt – thanks a lot – look for my upcoming post on “How to give one of your star CEO’s a pay cut.”
- We need to clarify our messaging: Our customers and prospects (and probably our employees) have no fucking idea what we do. This usually also means the VC doesn’t know what the company does.
- We need to do a better job of filtering our sales prospects so we don’t waste our time on bad leads: Our marketing / demand generation sucks – we’re not targeting the right prospects. This is often a result of a nice pipeline, well presented and formatted, but with no resulting sales. Sometimes this is a marketing problem; sometimes this is a sales problem: often it’s both.
- We need to strengthen our sales pipeline: We’re doing a crappy job in sales, but I’ve decided to be nice today either (a) because I’m in a good mood or (b) I don’t want to demoralize a team that knows it’s having trouble bringing it home. I put this phrase in the “yellow warning flag” category – you usually don’t get to hear it twice (unless your VC is a very blissful person).
- You need to focus on your core business fundamentals: You guys have no clue what your priorities are. This is a cliche born out of frustration that often leads up to a more serious discussion with the CEO about the systemic problems in the business (or more specifically, why the business is melting down.)
- You need to get alignment among your management team: This one means two things: (1) One or more people on your team suck and need to go and (2) You – as CEO – are doing a sub-par job of leading the charge – and it shows.
- You need to upgrade your management team: If you have the ability to read between the lines, this often means “if you don’t fix your management team, we’ll focus on ‘fixing’ you.”
Term Sheet Negotiations (Ode to Matt Blumberg’s Post)
- We bring more than money to the table: Uh – yeah. What would that be again?
- That’s an industry standard term: Hint – there are no industry standards in the venture business.
- Don’t worry about pre-money – we’ll take care of you later: Did your mom ever says, “Honey – don’t worry about the water – c’mon in, it’s not too cold.”?
- Don’t focus on percentages: This is kind of like saying to a 747 pilot “don’t bother paying attention to where the runway is – just land where ever you want.”
- Don’t worry about that term, we’ll never actually enforce that: Um, right.
Reasons to Pass on Investments
- It’s not in our sweet spot: I’m still looking for my own personal sweet spot – maybe that’s why I’m so sarcastic feeling today.