Types of investor misbehavior
I recently completed a pre-seed fundraise for Partly [1], and I thought I’d share some of the negative experiences I had with investors. Most people who fail to raise money can’t share all the horror stories - they don’t want to burn bridges. And people who raise money easily (i.e. if they already have traction, or are in a hot area) often don’t see as much misbehavior. It’s folks in the middle that often have the best view of things.
As soon as you change your job title, or when word gets out that you’ve left your job, associates at VC firms will reach out to you and ask to get coffee.
In several cases, an associate misinterpreted the business and then ruled the fund out from investing before I could formally pitch a partner. In other cases, we’d spend weeks in random scheduling / emailing that was not productive (did not move the needle on a deal, did not build a valuable relationship, did not get useful advice for the business, etc)
Associates would regularly lie about a partner joining a meeting, about an investment committee happening where the deck would be reviewed, etc. I didn’t see as much outright dishonesty from partners…I suspect because they have reputations to protect.
