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Spice Girls VC

So one day a few years ago I'm sitting in a VC's office having a chat. I had a few ideas rattling around in my head but the VC had his eyes on a then-current space which was hot. He tossed a business plan for one of the leading startups into my lap.

"Where'd you get this?" I asked.

"They gave it to me."

He went on to talk about how he wanted to launch a company into the space as well, and I'd be a great vp eng. He said he knew a guy with some technology who could be cto, had a vp marketing in mind, and then we'd just need a world class ceo to round out the band.

I formed a theory that the process of seeking VC ended up calling your own competitors into existence. You'll meet with many more VCs than the 1-2 who end up funding you. But after seeing a company or two get funded in your space, the VCs who passed or weren't able to get in decide they want to have a bet in the space too. Fortunately they have the benefit of having heard your pitch and the opportunity to personally grill you at length on your approach.

But doing the Spice Girls or N' Sync thing to put a startup together can be tricky. Startup founders can be so cranky / eccentric.

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Comments (3)

I'm guessing that from the viewpoint of the VC/investor, you don't have to stay long enough to make history, just long enough to make money. :-)

Ben:

It is amazing to me how VC's don't get the subtle things you can change in a powerpoint so you know who passed it around. Actually forget subtle, how about not subtle when you put thier name on the footer of every page and they still pass it around.

I formed a theory that the process of seeking VC ended up calling your own competitors into existence. You'll meet with many more VCs than the 1-2 who end up funding you. But after seeing a company or two get funded in your space, the VCs who passed or weren't able to get in decide they want to have a bet in the space too. Fortunately they have the benefit of having heard your pitch and the opportunity to personally grill you at length on your approach.

I think I will call this Skrenta's Law of VC Fundraising: The process of seeking VC in a new market space creates new competitors.

You may have an even more pithy formulation.

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