I attended a breakfast run by Tony Perkins and AlwaysOn last week in preparation for their upcoming, inaugural event in Boston "AlwaysOn – East". I’ve attended the NYC event a few times and although they are a bit too buzzword compliant, they tend to attract a high-quality audience in the consumer new media start-up market. Tony and team are now trying to bring the model to Boston (April 8 and 9) and broaden its market segments to appeal to players in enterprise IT, life sciences and cleantech markets as well.
Anyway, the breakfast was a group of 75 or so entrepreneurs, VCs and service providers gathered to give the AlwaysOn team some perspective on the Boston start-up community. What really struck me was the nature of the dialog in the room. It was almost as if the local entrepreneurs, bemoaning their lack of success in securing funding, rationalized that it must be due to the inadequacy of the Boston VC community. In effect, they wanted to play the ever-popular game of "blame the VC".
Here’s how the game is played for those of you not familiar with it. First, assume you are a combination of Steve Jobs, Bill Gates and Larry Page rolled into one that your start-up idea will be worth somewhere north of $100 billion.
Next, approach a number of VCs to pitch the deal. One favorite approach is the cold email (ask your VC friends how many "transom" or cold emails result in funded businesses and you’ll probably hear that the typically long odds of 500 to 1 go to 50,000 to 1).
Then, when you don’t get funding, play "blame the VC". Tell all your friends that those risk-averse idiots wouldn’t know a good deal if it hit them in the face. And especially the ones in [insert your geography here].
By the way, this game is played by all entrepreneurs all over the world – new and old. One of our portfolio CEOs, a successful serial entrepreneur, pitched 40 VC firms before securing his follow-on round. It turns out, 39 of those VC firms were total idiots. Only one had the keen insight to see the value in his company and fund it. Another of our portfolio CEOs just recently complained to me: "Silicon Valley VCs all fall into such groupthink. I have no interest in working with them". Funny enough, those comments precisely echoed the comments from the Boston entrepreneurs in the room at the AlwaysOn breakfast!
Now obviously I’m being a little cheeky here. Passionate entrepreneurs should indeed ignore all the "nattering nabobs of negativism" (to quote Nixon’s former VP Spiro Agnew in a line penned by William Safire!). But let’s tone down the blame game a bit, shall we? If you don’t get funded, there is probably some underlying, logical reason why beyond the fall back "blame the VC" game. It’s probably worth thinking deeply about what you can do to improve the idea, or modify your pitch, rather than whine about the unfairness of it all. To quote Benjamin Franklin: "Any fool can criticize, condemn and complain. And most fools do."
Now I do admit, that is an aphorism that cuts both ways!