Investor Reference Checks

In the past few weeks, I’ve witnessed startup investors being incredibly value-add and also seriously destructive. It always surprises me who ends up in which camp – my gut feeling is often wrong. There also seems to be little correlation between an investor’s value-add and seniority, background, or their fund’s ‘tier’.

The same can be said for the founders I work with. Trying to gauge the value-add of an investor feels nearly impossible during the fundraising ‘sales’ process (on both sides), and a founder backing out post termsheet because of a negative investor reference is nearly unheard of.

Something Kevin Kelly mentioned about reference checks (1) struck a nerve with me recently – that people are “reluctant to say anything negative” (which we all know) and to “elevate good behavior 10x more than punishing bad behavior”.

Kevin’s suggestion is to write a quick note asking to “get back to me if you highly recommend this <applicant> as super-great”

My first thought was that founders should write a similar “let me know if this investor has been highly valuable” email to a potential investor’s portfolio companies (2). That works fine on an individual basis, but the information is lost to the broader ecosystem.

Idea: send an email/message on the yearly anniversary of every investment round to every founder in the world, asking if each investor is incredibly value-add.

Then I thought, why not bake this idea into one of the many investor feedback sites that have launched recently? Or better yet, launch a new platform that simply asks “Is this investor incredibly value-add?”

No 1-10 ratings. No ‘Quite friendly’ or ‘They showed up late’ feedback. No investor rebuttal. Just the plain truth if an investor is incredibly value-add or not. Then display a ranked list of what investor has the highest number of founders who believe they’re incredible. Now that’s something I’d like to see.

(1) Bits of Advice I Wish I Had Known
(1b) Freakanomics Podcast

DUBNER: Here’s one that resonated with me in part because it’s very practical and in part because it has happened to me. You write, “When checking references for a job applicant, employers may be reluctant or prohibited from saying anything negative. So instead,” you write, “Leave or send a message that says, ‘Get back to me if you highly recommend this applicant as super-great.’ And if they don’t reply, take that as a negative.” Does that actually work? Do you know people who’ve had success with that method?

KELLY: Yes, I have used that method. There is a kind of a weird cultural moment right now where there actually are companies that cannot comment on previous employees and stuff. There’s a bias to saying anything negative for various reasons. But I have used this model of leaving a message on an answering machine earlier and now with an email saying, “Only reply if this person is super-great,” and sometimes I have not heard back anything. That’s a sign. And other times I’ve heard back, “Yes, you’re lucky to have this person.”

(2) Dear founder, I am considering taking an investment from <NAME>. Could you get back to me with a simple ‘Yes’ IF they have been incredibly value-add and you highly recommend them? If they are truly amazing and I’d be lucky to have their support, then I’d appreciate hearing from you.

The Components of Speed

I’ve always noticed speed varies drastically from company to company. Some are amazingly efficient, while others meander (or worse).

Recently, a founder asked me to help significantly increase their company’s speed. After a few conversations, we distilled the issue to focus and accountability. Basically, cut activities that don’t directly create value and stop accepting mediocre results.

I wonder, are focus and accountability the key drivers of speed at any company?

Are there other components of speed I’m missing? Do most companies consider how specifically to increase execution speed?

One aspect may be the mentality of team members; maybe some inherently execute faster and this company just has slow people? Or can anyone be fast when key company and leadership components are in place?

Basically, I’m left with more questions than answers. But I’m pretty confident speed is a leading indicator of a company’s success.

(1) Surprisingly it was a first-time request… seeing as how common the issue is

Me on the Iron Throne

Here’s one of my favorite slides from the “Going Global” session I hosted today with some amazing ScaleNL Dutch founders.

While some people present what they know, I basically overshare all the things I screwed up over the years… kind of like my version of group therapy.

I remember caring so much about consistency, brand, execution… when none of that really moved the needle compared to trusting and supporting the great people around me.

Hopefully reliving me on the Iron Throne trying to force people way smarter than me to ‘bend the knee’ will help others not make the same mistake 🙂

Cold Emails

I love what Stéphane and his crew at OpenVC are building, such an amazingly open ethos. They shared 14 actual cold outreach examples recently sent to VCs, all had the same general cadence:

Hi <VC>, I’m <NAME> with <BACKGROUND> building <PRODUCT> achieving <TRACTION> raising <ROUND>.

Anything feel off to you? Basically, all 14 are totally canned. And these were the best 😐 If you’re a VC, do these ever actually convert?

Email 5 at least writes “we feel like a great fit for <VC>”, but doesn’t qualify why with applicable examples.

Email 11 refers to a “chart on your website”, so at least there was a glance of research, but nothing further?

My guess is the amount of research/commonalities a founder refers to in a cold email directly correlates with their first call conversion rate:

Canned < 1%
Highly targeted > 10%

I wonder how many first calls an email like this would get…


Congrats on closing your fund <#>, I’m sure <INVESTMENT> must have helped – what an amazing company!

I noticed your post <POST> and investments in <Y> and <Z>, we seem to share a common interest in <INDUSTRY/MODEL>. In fact, I’ve been building <COMPANY> to solve <PROBLEM>, which I’m guessing you have some experience with as well…

Whatever else is written from here, as long as it’s concise, my guess is the VC would appreciate the outreach enough have a conversation.

If a founder puts this kind of effort into an investor email, just think what they will do to win customers, staff, etc. (or so a VC might say to themself).

Gratitude Coorelation

I’m making a few VC intros for a founder I rate highly, the replies:

A+: “Many thanks for the intro!”
A: “I appreciate you thinking of us!”
A- “Thanks for sharing the opportunity” (x2)
B: “Please introduce me”
B-: “Happy to speak with them” (x2)
C: “We will have a look”

I wouldn’t say the differences are huge, but next time I’ll certainly consider prioritizing the 50% who say thanks.

Interestingly, how appreciative the reply is correlates well with the ‘tier’ of the fund – the A’s are all top European VCs.

Interesting vs Critical

The hardest discussions to table are interesting, relevant topics that aren’t critical.

I find most meetings cover important topics in-depth, leaving critical ones for the last few minutes. Simple questions easily lead to everyone chiming in. Challenges are often listed, but rarely stack ranked.

This seems especially true for board meetings. Board members want their questions answered, and few CEOs feel comfortable tabling most questions… even if doing exactly that would accomplish the most.

Idea: take note of all non-critical questions and provide written answers within 3 days of a meeting?


A founder recently asked for my advice about creating hype and FOMO while fundraising, stemming from a post making the rounds in entrepreneur circles. Their take was…

“Based on the article, we should pretty much stop engaging with VC’s at the moment as we’re not (actively) fundraising, that information is a currency, and a certain amount of mystery seems key. Better to disengage entirely for the best chance of success?”

Something didn’t sit right, I better have a peek at this article – is it really suggesting founders not to engage with investors until actively fundraising?

Most of the advice is solid: a ’sherpa’ can help with introductions and navigate discussions, other investors suggesting a ‘hot deal’ creates urgency, craft your story based on current trends, don’t waste your time with tons of investor calls, be creative when attracting interest. Yep, that all resonates.

But this founder (and quite a few others, I’m told) focused on ‘intrigue is an asset’ as a key takeaway. If they plan every interaction, minimize casual interactions, and fill an investor’s mind with good news, then mystery and the magic of ‘limitless potential’ is created. Which then leads fo FOMO and ultimately investment.

In essence, unless you’re in total PR mode when speaking to investors, they’ll find out your company is a complete disaster and never invest in you.

To me, it felt like used car sales tactics more than finding a decade-long business partner and board member. But maybe I’m missing something? Perhaps the combination of planned, formal, mysterious, and good news is indeed the path to creating FOMO and raise a round?

So I called several investor friends (7 in total, all Partners of active VCs) and asked for their take on FOMO and relationships during fundraising. How did they source their best investments? How do they advise founders to fundraise? What % of their deals are FOMO related?

Instead of writing a slick post or creating an ultra-hip tweetstorm, I’m directly passing on the feedback I shared with the founder who initially asked for fundraising advice. It’s a combination of these 7 investor conversations and my personal experience. I hope it helps on your fundraising journey… may the FOMO be with you 🙂

1) Fundraising is about building a relationship over time, based on genuine/open/honest conversations (eg lines not dots)

2) The goal is finding someone you can spend a decade+ building with, who adds much more value than just money

3) Building investor relationships can have upsides other than fundraising, like introductions to potential revenue/staff/etc

4) Investors have seen it all (startup ups/downs), they see through planned ‘good news’ interactions (eg “the shit comes out in DD”)

5) A too much intrigue can set expectations too high, create trust issues, and even kill a deal that would have gone through

6) Instead of being ‘mysterious,’ think about frequently reaffirming the big vision (1/3) while sharing wins (1/3) and struggles (1/3)

7) Short term FOMO (eg mainly dark until fundraising) does happen in +-25% of rounds, vs 75% based on long term (9+ mo) relationships

8) This kind of FOMO is usually because of serial exited founders, incredible team, insane traction, or significant market change

9) FOMO fundraising can work, but there’s high risk if the market doesn’t form and you’re left with limited relationships to fall back on

10) When a FOMO fundraising ‘works’, it’s hard to push through IC, the dynamic can be off, and there’s limited rapport to work from

11) Optimal rounds are pre-emptive offers (with others then bidding), which entail some kind of dialogue and relationship

12) Treat fundraising like business development by segmenting your list into A) 5-6 top prospects B) 10-20 decent potentials, C) 40+ all other leads

13) ‘Massage’ deeper relationships with an A list YOU choose, vs 20+ surface exchanges with ‘time-wasting’ incoming interest

14) Spend time being top of mind with existing investors, frequent ambassador mentions to your A list go a long way 

No trust, no sale


Selling is often considered an art form. It takes no less than the most fine-tuned of inter-personal skills and a precise focus on value.

But value is in the eye of a beholder, and to truly sell (I’m told) requires the innate skill to first empathize with a customer’s needs… and then at the perfect moment deliver an optimal solution to their largest problem.

Sales mastery in action

I’ve been lucky enough to witness sales mastery on a few occasions. It was indeed like watching an artist, with a few commonalities:

  • First the groundwork is laid, maybe an initial joke leading quickly to a personal connection
  • Next a mutual commiseration of shared problems and struggles
  • Then the soft touch of a potential solution, delivered ever so delicately at the opportune time
  • And lastly, the close. With the swiftness of a cheetah that somehow leaves the antelope feeling like it won

The ruin of a sale

Someone tried to sell me something today – and it felt all wrong. It simply wasn’t an enjoyable experience.

This bugged me because I was the perfect customer. In fact, not only did I deeply identify with the problem, I had sought out my own solution – which the service I was being sold solved perfectly!. To top it of, the service was FREE and delivered to me on a silver plate.

What was my deal? I had a problem that I unsuccessfully tried to solve myself but couldn’t, and someone was offering me a perfect free solution.

So why did I walk away feeling like a snake charmer just tried to scam me?

Because there was no trust. No groundwork was laid – it was straight to the sell.

The art of trust

Many sales acronyms exist. There’s DIPADA, DMAIC, among others. They’re mostly similar: Identify the problem, present a tailored solution, and close the deal. Some include smaller interim steps such as identifying the key stakeholder and creating time sensitivity – but the main topics remain the same.

What typically isn’t included in a sales process? BUILDING TRUST. Yet developing trust through a true customer connection is the most important element of selling.

Unsurprisingly how to quickly develop a trusting relationship is the most difficult step to teach. Much like delivering a pick-up line… it’s largely an innate ability.

It may involve a simple friendly smile, sharing a story, or keeping a promise. While the tactics may differ, the results are the same.

One of my heros Rand puts it well:

“Best way to sell something:
Don’t sell anything.
Earn the awareness, respect, and trust of those who might buy.”

So the next time you’re selling (we’re all selling something), think for a moment about the personal connection you’ll need to make to build a sale. Without laying the groundwork of trust, you risk coming across as an insincere salesperson to even your most opportune customer.

The interaction of academia and business


I recently met well known author and professor John Mullins – who not only accepted my blind lunch invitation, but was nice enough to invite me to the LBS faculty dining room (best lunch I’ve had this year).

After sharing our backgrounds, the conversation moved to John’s recent research surrounding startup funding and the value of relying on customers for initial cash as validation – opposed to raising angel/VC funds (that’s for a separate post).

I walked away not only with a full belly, but pondering the intake criteria of many startup accelerators and how the industry views initial funding as a ‘proof in the pudding’ milestone.

It really is amazing how one conversation can completely alter your thoughts from a daily task list to the highest strategic objectives of an industry.

It’s hard to believe I didn’t realize until just now how valuable a research-based academic conversation can be… and this is coming from someone with an academic as a best buddy!Watch Full Movie Online Streaming Online and Download

Everyone needs a regular change of perspective, and I for one will be seeking them out much more often. Not only with academics, but people who are generally interesting and willing to disagree with me. But if they do happen to be academics, then hopefully more posh lunches are in my future!

Rise of the walking meeting

Rise of the walking meeting

Remember back in the day when standing meetings were so hip?

For a while now I’ve been think about how my life has turned into a non-stop series of static meetings in either conference rooms or coffee shops. Nothing is original, the air is stale, and the background music lulls me to sleep.

Standup meetings: Do they work?

Perhaps it’s a matter of bad company culture. Why don’t we all stand up… that’ll solve everything! Right?

For me, the daily standup is a ritual I’ve lived through and even implemented Unfortunately, after the first few weeks it somehow just dropped off.Watch Full Movie Online Streaming Online and Download

Although standup meetings may allow for a little distraction-free leg stretch, you’re still in a typically stale office environment. Surrounded by the same people sipping the same coffee/tea and saying the same things as yesterday.

The WSJ even wrote about the “fast-moving tech culture” where some companies went as far as removing tables to prevent (Angry Birds) distractions.

Standup meetings haven’t been the only trend attempting to disrupt the traditional office environment. There was a time when sitting on exercise balls was “in”, and even now a few articles mention the treadmill + desk combination (walking desk) as the next big thing.

The Walking Meeting

Why not change your whole frame of mind and leave the office completely? I’m not talking about going to a distraction-filled coffee shop or grabbing a quick lunch…

I’m suggesting holding your typical bulleted agenda with discussion meeting while walking.

How great would it be to begin a meeting at Westminster Abbey and end at London Bridge? Or easier yet, why not meet a colleague in the lobby to take a few loops around the neighborhood?

The core idea provides a more accessible, focused, and cheaper alternative to golf’s walk-and-talk dynamic. Though unlike golf, my core hypothesis is that walking meetings will produce original thinking and allow the participants to return refreshed and ready to move on with their day.

In general, not only would a walking meeting help achieve that crazy Fitbit 10k step goal, it removes participants from the status quo to provide much needed headspace.

So who’s with me? Any takers on setting up a walking meeting? I’ll even be your first partner! Conversation topic is completely up to you, I’d just be happy to get some fresh air and remove myself from the monotonous daily routine we call work.