Ask HN: How to recognize a “bad” VC? | Hacker News Reader

Ask HN: How to recognize a “bad” VC?

11 pointsneurobot8 comments

Pardon my english. Sorry If this question has been asked before.

I'm seeking an advice and a good discussions about .. [title].

I have a target VC that I would like to submit my pitch-deck, but I tend to wait because I'm not quite sure about them, and this is a reason why I ask this question, and I need some insight.

First, on their website they write a lot of a good things, it's a psychological way of thinking, and me especially incline to think the opposite because there's no a good things when the money involved.

Second, I don't know which person, but based on my research, they have an account in the caymand island.

Third, they promoted their VC through bloomberg and few other news agency, but I tried to tracked the article and I couldn't find it on those site because the article has gone. I don't know how it could be possible.

Above of that, you might raise a question, why I might still want to choose them.

fourth, their investor had an investment in paypal and space-x.

fifth, the VC also announce that they will limit the startup they want to invest. at the moment they have 4 startup they've funded so far. three in my country one in abroad.

Sixth, They offer more money than any other VC.

Should I avoid this VC and find another VC? or I still submit my pitch-deck to them?

or It is possible to ask straighforward to them from email, like Hey, I would like to submit my pitch-deck to you but I'm not quite sure because.. bla bla bla? should I do this?

Thanks

Gonna be harsh - this is just not how it works. You sound totally clueless and are not a candidate for VC investment. Spend some time learning about the startup industry - read pg’s articles, other reputable sources - if you want to get involved.

Visit thefunded.com, which is like yelp for VC's. You'll see which ones are bad and which ones are really bad.

Even if your idea is brilliant and your team and plan are also brilliant, many VC's won't be interested in investing. Too early, too late, already have their money in a competing firm in the same space, not their specialty, Mercury is in retrograde..

if you don't want to submit to them, don't submit to them, and feel good about it.

What’s the AUM of the VC? Do they have a long history of success? Be weary of any thing on a website. I have seen startups lie about their VCs, and I am sure some VCs do the same. They are just betting their won’t be caught cause there are so many around. Do you know anyone to vouch for them? Plenty of VCs individuals tend to be predators because they know startups are desperate. Few startups investments does not necessary mean they are choosy, VCs like to bet the entire table rather than pick since they know it’s hard to find winners base on gut feeling. Yes, it’s gut feeling and who you know when you don’t have cash flow. Read the contract 3 times and seek legal counsel.

Since it sounds like you are doing a cold call and pitch, I don't think you know if this vc you target funds at your stage and has a suitable investment hypothesis. While this one could work out, I would set expectations with you that you will need to pitch 10 to 20 vcs to know if you have a fundable pitch.

Remember that not fitting the vc model might still mean you have a great business, they just have a particular model.

There are a lot of good reasons to do your first round through Kickstarter, for example, if you have a direct to consumer product.

Good luck

If you can't assess what it might be like to work with someone, you can only build that skill by working with someone. I say start a conversation with the VC. If you get to the point where they wanna offer you money, ask yourself if you'd be willing to trust this person when things get hard. If you can't come to trust them, think real hard befoe you take their money.

Send your deck. You can worry about how good a VC they are when (if) you get a term sheet.

You should ask their portfolio companies' founders and speak entrepreneur-to-entrepreneur about their experiences working with this VC. Do your due-diligence before getting into bed with anyone.

Just submit it and if they are interested you can ask them in person?

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