Comments on: 4 Questions and 4 Pressure Tests To Decipher A VC’s Interest In Your Company http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/ Some thoughts on VC, some on tech, and some on other stuff. Sat, 11 Feb 2012 01:50:00 +0000 hourly 1 http://wordpress.com/ By: Is your idea too valuable to keep quiet, or too valuable to talk about? – Pieter Peach http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-551 Wed, 01 Jul 2009 05:11:14 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-551 [...] 2. Bother with NDAs.  An investor who knows enough about your idea to be interested (and probably enough to realise they’re not invested in a similar space) will bother signing. Anyone else is not interested or serious enough and you should look elsewhere. Here is an example of a VC that signs NDAs, and why. [...]

]]> By: Rob Go http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-546 Tue, 30 Jun 2009 15:27:38 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-546 Nice post Larry!

]]> By: larrycheng http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-544 Tue, 30 Jun 2009 11:42:04 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-544 Hey Pano – long time. Great advice as well. If you have the leverage to set the process and timetable with confidence, that certainly helps focus the mind on the VC side. But, if deadlines pass and it seems like you don’t have the traction you want, it will be obvious to the VCs as well. But, I think you’re suggesting that for companies that clearly have enough interest that they’re not worried about being left at the alter so to speak. Totally agree. Shoot me a note and tell me what you’re up to these days.

Larry

]]> By: Pano http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-543 Tue, 30 Jun 2009 11:27:21 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-543 Good stuff Larry. Having raised capital ovrn 11 rounds for 3 companies, I would submit that all of these questions provide an indication of interest, but one of the best ways to test vc interest is for the entrepreneur to set the dates and see how he vc responds. this presumes competition on the deal. It’s not just about raising money, but raising it with some entreprenurial leverage. If you cannot set dates and the process and say no at least once to the vc, then you are in a tough position. Companies with great products and traction don’t have to worry nearly as much about deciphering vc interest.

That said, you point out the true tell-tales.

Oh and one more sign of interest is when the vc pitches the firm after you have presented with “So can I tell you a little about xxxxx?”

]]> By: larrycheng http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-542 Tue, 30 Jun 2009 11:19:41 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-542 Hey FN, I guess I need to watch Swingers. Maybe I’ll make it a holiday weekend endeavor.

]]> By: larrycheng http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-541 Tue, 30 Jun 2009 11:18:55 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-541 John, I agree with you. I think the signs are pretty clear. I wonder if there’s more gamesmanship in strategic M&A given that usually there’s the business unit that is sponsoring the deal and the corp dev team that is charged with closing it. When you get into the latter group, the gamesmanship begins.

]]> By: larrycheng http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-540 Tue, 30 Jun 2009 11:17:08 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-540 John – good advice. Though #4 is a weird one. Opening 5 LPs (or even any LPs) to entrepreneurs for diligence is a new concept. Not sure how practical that one is. Have you done that?

]]> By: larrycheng http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-539 Tue, 30 Jun 2009 11:14:43 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-539 Hey Lee, I think every partner is different. My process is pretty similar to yours. I would just say that whether an NDA is signed, I still operate like an NDA is in place. It’s just good business practice in my mind.

]]> By: larrycheng http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-538 Tue, 30 Jun 2009 11:10:39 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-538 Josh, I haven’t been on the other side of the table. What have you learned from your experiences with those firms? Please do share..

]]> By: John P http://larrycheng.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-534 Mon, 29 Jun 2009 23:42:16 +0000 http://larrycheng.wordpress.com/2009/06/29/4-questions-and-4-pressure-tests-to-decipher-a-vcs-interest-in-your-company/#comment-534 Furqan,

I agree with the analogy but I think the movie “He’s just not that into you” is usually more appropriate.

Larry, great post.

I think the truth is that the signals are obvious enough if you want the truth and the questions that you and John A. suggest are right on the money to suss out true interest level. And while the questions are different, there are very similar issues in strategic M&A.

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