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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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The VC Version of Kick the Can

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I got an email this morning from an entrepreneur that I know that has been trying to raise an early round from a "seed VC investor" for the past few months.  He’s put together (and closed) a decent angel round and left it open for this seed investor.

This morning the entrepreneur was told by the VC that they are "postponing their decision on investment until a future round" because one of the partner’s friends at BigCo "isn’t comfortable with the direction the startup is headed." 

I asked the entrepreneur who the person at BigCo was.  I know plenty of folks at BigCo in the relevant area and wanted to do a reality check for the entrepreneur.  He responded that the partner at the VC firm wouldn’t say – just that it was a good friend.

I told the entrepreneur to move on and not worry about it because I put this in the "VC kick the can" category.  Given that data above, I don’t think the VC was ever serious – if they were at a minimum they would have connected the entrepreneur up with the person at BigCo. 

Remember kick the can?  It’s a game that is mildly entertaining but fundamentally pointless.  You play it because you are hanging out, have nothing better to do, and feel like playing a game is better than doing nothing (with my apologies to children all over the world.)  For whatever reason, VC’s play this game with entrepreneurs all the time.

I’m sure I am occasionally guilty of it but I try really hard not to be.  The best move for an entrepreneur – when they find themselves in a game of kick the can – is to pick up the can and say something like "so – are you serious about funding us or not.  If not, just tell me.  If you are, what do we need to do next to get to a deal?"

Dear entrepreneurs: Just because your VC can’t seem to make a decision doesn’t mean you should be an enabler.  Kick the can usually ends when everyone gets bored of playing.

  • http://www.bostoncapitaladvisors.com mark slater

    Haha – i thought it was an english game! i played it when is was young back in london and have never heard it since i lived here (15 years).

    Anyway – good post Brad – its refreshing to hear you calling out your peers on this type of questionable behaviour – as a banker i have a particularly sharp nose for it.

  • Sue Kunz

    I'm not sure whether the difficulty has to do with making the decision or articulating the decision. Some do this better than others. For the later, I can recommend the “rejection hotline”. Learned this from my kids. 303-607-7527 It's a hoot!

  • Carmin Turco

    Pitching VCs is just like dating… you brush up, put your coolest dress shirt on, memorize some obscure Chris Rock joke and make sure you've got plenty of cash in your pocket. It's the best you can do. Whether you come home with lipstick on your neck is someone else's decision.

    There's plenty of fish in the sea, baby… shake your money maker.

  • Gregory Poole

    I have a business idea I want to sell. The revenue generated by this proprietary
    endeavor will come from an individual member pool of 50 million individual U.S.
    workers.

    By being the FIRST and ONLY membership organization representing these 50
    million US workers, my business promises to be a multi-billion dollar per year
    enterprise with avenues of revenue to be driven by the following:

    Membership Dues

    Federal/State Government Subsidies

    Corporate Subsidy

    Corporate Advertisement, etc.

    Unlike all other professional membership orgainzations, My business idea is
    designed to make EVERYONE money (which will drive membership through the roof)
    and excludes NO ONE. AND would assist in eradicating our national problem of the
    working uninsured.

    Provided you complete the necessary Confidentiality Agreement, I would be more
    than eager to discuss your interest in the purchase of this incredibly
    profitable business idea.

    Regards

    Gregory Poole

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