Nivi · November 12th, 2007
Brian: Tell me about the funding process.
Farbood: I think raising money is great fun. The bottom line is that the money has to be spent. VCs are not in the business of holding their Limited Partner’s investment in a 5% security. They have to spend the money on startups. So, either your startup gets the money or someone else’s startup gets the money.
No VC has a perfect track record, nor do they pretend to. So, (1) either your idea or business sucks and the VCs knows it (despite their imperfect record, they are not bad at telling) or (2) you suck at explaining it. There is literally more money to invest than the world’s VCs know what to do with.
Getting a meeting is another issue.
What did you learn from raising your Series A?
I learned that a disproportionately large percentage of VCs, relative to most populations I’ve encountered, are extremely smart, gregarious, easy to get along with, excited, positive and insightful. I’m usually surprised when I meet one that isn’t.
This makes financings a far more positive experience than they would otherwise be and, just as importantly, makes the time and energy spent in meeting with them worthwhile in and of itself.
I also learned that, amazingly enough, of time, money and great people, time and great people are more scarce.
Any parting bits for entrepreneurs out there?
Make sure your deck is great not good.
Read the rest of the interview where Brian and Farbood discuss Grockit and the massively under-served education market.