When VCs Don’t Bullshit You

I know many entrepreneurs who feel that VCs have played them, gamed them, deceived them, or bullshitted them. But this doesn’t only happen to entrepreneurs. VCs play this game with VCs all the time.

One of our deeply held beliefs at Foundry Group is that there is no value in bullshitting anyone. We screw up a lot of things, make plenty of mistakes, and often look back and say some version of “oops.” But we never bullshit each other or bullshit anyone we work with.

Seth, Jason, and I had an awesome dinner with one of our LPs last night. In addition to being an incredibly supportive investor in us from the beginning, this LP has become an extremely close friend. He’s someone we trust with anything and listen to carefully whenever he has feedback. And we always enjoy being together – a lot.

As I was walking home after dinner, I thought about the person who had introduced us to this LP. His name will be familiar to plenty of you – it’s Fred Wilson. This LP is also a long time investor in Union Square Ventures and was one of the first people Fred introduced us to when we started raising the first Foundry Group fund in 2007.

In 2014, it’s easy to reflect on what has happened over the last seven years and feel good about it. I’m fortunate to have three amazing partners, an awesome team that I get to work with every day, a hugely supportive set of about 20 LPs, and hundreds of entrepreneurs who we love to work with, and whom I think respect us and appreciate us a great deal.

But is wasn’t always this way. In 2007, when we set out to raise our first Foundry Group fund, early stage tech VC was in the shitter. No one believed that you could make any money as an early stage VC and when we went out to raise our first fund, we heard over and over again that we were on a fools errand. The prior fund that I had co-founded – Mobius Venture Capital – had blown up after having a very successful first fund in 1997. The collapse of the Internet bubble was not kind to us and by 2005 it was clear that our second fund – raised in 1999 – was a disaster, and our third fund – raised in 2000 – was off to a very rocky start.

In early 2006, my partners at Mobius and I decided not to raise another fund. In 2007, several of us (Jason, Ryan, Seth, and I) set out to create a new firm.

I thought I had a lot of VC friends and supporters from the last decade of my life as a VC. I quickly learned that it was easy for these so-called friends to say “I’ll help” and very hard for them to actually follow through.

When we started raising our first Foundry Group fund in 2007, I called many of the VCs I knew and asked them for introductions to their LPs. While some of them said they would help, I only recall three who actually made any serious introductions.

Fred Wilson at Union Square Ventures was by far the most helpful. Fred introduced me to all of his significant institutional LPs. We had been friends for a long time and had worked together on several companies. I had deep respect for Fred and I think he felt the same way about me. There was no hesitation on Fred’s part – he made real introductions, advocated strongly for us, and was unbelievably supportive. Over 33% of our capital ended up being from the same LPs who invested in USV. I will never, ever, ever, forget this. Fred can ask me for help on anything he wants for the rest of his life and I will always be there for him.

The next person on the list of supporters is Scott Maxwell at OpenView Venture Partners. Scott and I were both on the Microsoft VC Advisory Board that Dan’l Lewin organized and ran. While we had never invested together, I felt like Scott was a kindred spirit. We both spoke truth to Microsoft execs, even though they mostly ignored us. I remember a meeting with the Microsoft Mobile 6.0 team as they were pitching us their vision for Microsoft Mobile 6.5. Both Scott and I, on iPhone 1’s or 2’s at the time, told them they were completely and totally fucked. They ignored us. A year or two later they had less than 3% market share on mobile. We had a blast together and as we went out to raise our Foundry 2007 fund, Scott made several introductions which resulted in two wonderful, long term LP relationships.

The last person who was helpful was Jack Tankersley at Meritage. When I moved to Boulder, Jack was one of my early mentors. He was a partner and co-founder of Centennial Funds and he and Steve Halsted basically created the VC industry in Colorado in the early 1980s. Jack was extremely helpful in coaching me on how to create a new firm and made a number of introductions, one of which became an LP. I appreciated the energy he put into this immensely.

There were at least a dozen other VCs who said “I’d be happy to make some introductions for you.” Very few of them did, and the ones that did made introductions to junior people at LPs who quickly blew us off.

My partners and I are forever appreciative of Fred, Scott, and Jack’s help. And, after 90 meetings in the first three months of fundraising, which resulted in 20 immediate rejections and no obvious path to a fund at the end of the first quarter, our appreciation for these three people grew. As we started to have momentum in the second quarter, Fred and Scott really stepped up and advocated for us. By September we were oversubscribed and did our first close with our final close in November. We’ve never looked back.

The wonderful dinner last night with the LP Fred introduced me to reminded me of this. But more importantly, it reminded me of how often VCs bullshit each other and entrepreneurs. And, in the situations where they don’t, how incredibly powerful it is.

Fred, Scott, and Jack – thank you.

  • that’s very nice of you to say publicly Brad. i appreciate it very much.

    and you let me invest in Foundry too. which i am very thankful for. it’s pretty easy to say to your LPs “i’m investing in this fund and i think you should too”. actions speak a lot louder than words

    • Indeed they do! The cliche “put your money where your mouth is” applies…

      • Joah Spearman

        Brad, thank you for writing this post and the authenticity of calling out the bullshit in the industry from all angles. Fred, thanks for inspiring the post and for what both of you guys offer up each day/week with your blogs. It’s much appreciated.

        • Thx Joah. Life would be a lot easier if everyone said what was on their mind and did what they said they’d do, or said they wouldn’t do it (e.g. “no” is a good answer…)

          • Joah Spearman

            So true. Starts with empathy, which I just wrote about in my last blog. http://joah.typepad.com/diatribes/2014/07/why-empathy-matters-to-me.html

          • ObjectMethodology.com

            I had a very pleasant phone call with a guy a couple weeks back. The answer was no to everything I asked. But!!! I wasn’t left hanging with empty promises or other lip service.

  • Sean OSullivan

    hey brad, I’m only bummed you didn’t ask me to be an LP! I think I was still investing in other funds back in 2007, and I’d have been glad to do it!

    that’s OK, we’ll just do some more co-investing… I’ve met some great investments through you and people we’ve worked together with, and I’ll pass on some great ones to you if you can find the space in your portfolio for them. 🙂

    No looking back!

    • Hey Sean! This reminds me to tell the story of NetGenesis and how I met you. I remember the first day you came to my office at 1 Liberty Square in Boston. Amy was sitting in as the receptionist that day because our receptionist was sick. I think the two of you were having some crazy philosophical discussion and I’m sure you were wondering “who is this woman and why is she working as a receptionist…”

      We ended up deciding in advance only to have institutional LPs in our fund. Having had 100s of individual LPs in the Mobius funds, we spent a long time thinking about this and ultimately deciding not to have any.

      The only non-institutional LP in our fund is Fred. As a thank you for all of his help, we said something like “Fred – if you want to invest, we’ll take any amount you want to give us – as much or as little – and if you don’t want to invest, that’s totally cool also.”

      It’s been fun to be on this journey with you. There have been a few moments, like the creation of Techstars Boston, where you have showed up in force in my life!

      • Sean OSullivan

        It’s been a great ride since those days in Cambridge/Boston at the start of the Internet, 1995… 🙂

        It definitely didn’t click Amy was your wife… but no matter what you surround yourself with interesting people, so I wasn’t surprised your receptionist was so brilliant!

        I second Mike Farmers comment about starting a Techstars for VCs 🙂

        I’m actually adding $300m to our evergreen fund really soon (kicking off the raise in October, and (insanely) hoping for a first close by January, to bring SOSventures to $500m+. I don’t know if you’ve written any blogs on doing this, but it’s my first time… I’m thinking maybe you could write a book on it for your startups series! I love your books man!

        Just need to get it to print by next month, to help a friend in need! 🙂 (problem is only about 200 copies would get sold).

        • I’ll help you without writing the book – that’d be a lot more efficient! Look for an email from me to set up a time to talk to see where I can be helpful.

  • No Bullshit = Respect from Entrepreneurs: http://www.seekomega.com/2011/02/the-top-30-most-respected-venture-capitalists-infographic/ You need to start a TechStars for VCs. Thank you, Brad.

    • A Techstars for VCs sounds like a nightmare!

  • carsly

    Great post and goes to show that some VC’s are no different from anyone else (in some respects) – lots of bluster, less follow-through and few trusted, valued relationships. It’s a small world, good relationships are one of the few things that persist over time, glad you’ve found a few in your journey Brad.

    • I’m super lucky. I’ve found a lot more than a few in many different aspects. And I value that immensely.

  • SURGE would not be in existence if it wasn’t for you and our friends at TechStars. Thank you. We are starting to raise our first larger fund to support the energy technology ecosystem that is being built. Your message is very timely, authentic, and filled with hope. This morning, I watched a few surfers ahead of me rip the chest high waves of Nantucket like it was their calling. Like you, these local rippers made it look easy and inspired me to join them. Once I made it out into the line-up, got tossed around like raggedy andy, and gouged myself from an errant skeg, I realized that hope is not a strategy and watching guys like you can be dangerous. The danger is lacking the self-insight to know my capabilities in relation to those that are more talented and/or have more practice. Regardless, we are paddling out anyway into the larger fund world…and what we lack in talent and/or skill, we will be making it up in persistence and pain management. Thank you for the inspiration and mentorship. See you in the line-up.

    • Great metaphor. And as I keep paddling, don’t be bashful about asking for help.

  • Fred Elabed

    This is a really awesome post Brad about perseverance! This really touched me.

  • I don’t mean to interject too much here in this obvious exchange that’s occurring between Brad and his long term friends and contacts, as I’m simply a public commenter on the blog, but I’ll quickly say that I’m not surprised.

    Last February I asked most prominent VCs in the industry to accept to be interviewed by me by email so as to contribute a story on my site about what it’s like to live in their respective city. I didn’t ask Fred Wilson, as I’ve asked Joanne instead, and I couldn’t get a way to reach Mark Suster, short of starting to contact various CEO’s in his portfolio — an exercise I wasn’t interested to go through for this type of project.

    Of all the people I did ask, *only* Joanne Wilson and Brad Feld have accepted to help a nobody — myself in this case 🙂

    P-r-e-t-t-y revealing…

    • Glad my words matched my actions in this case!

    • Underwhelmed

      Don’t see the bullsh*t there; the others weren’t interested in you or your project, so they didn’t accept. Bullsh*ting would have been if they accepted but never followed through.

      • Wow buddy, you’re really making me spell this out…

        I didn’t say that the particular behavior of VC’s towards me was bullshit.

        I said that because of it I wasn’t particularly surprised at the treatment that Brad has received from his peers who were supposedly his friends; when in fact, those individuals were likely too much into themselves and the “what’s-in-it-for-me” syndrome.

        What I was really saying is that Brad and Joanne were the only two VCs (angel, in the case of Joanne) who were willing to help a stranger (me) without seemingly there being anything in it for them — and to me, that’s a telltale sign of what type of individual they are at the core. And it tells me pretty much at a glance what I needed to know about who can really be trusted in the VC world when push will come to shove.

  • As you’re already aware, I have a deep cynical distrust of VCs in general so that’s where I’m coming from. I’m trying to get past it because I know its somewhat irrational but I’m not there yet. That said, I really like and dislike this post at the same time.

    The reason I like it is primarily because of you. As I’ve become more familiar with you and what you’re about mainly from interesting comment discussions here, its become evident that you’re not completely like my cynical VC caricature. From that point of view this is terrific. Its so nice to hear about a) you’re success, grats, but b) the circle of trust that have apparently built up to enable that success. That circle of trust is so important in whatever field of endeavor you’re in.

    Its also the reason I dislike this post, and somewhat intensely. When I read this post and then the subsequent comments from a litany of basically perceived to be rich people (i.e. LPs and VCs), what goes through my head is this is the essence of why people don’t like and distrust VCs in general. Its obviously an ole boys club and nothing angers people more than seeing a club they can’t get into, and that’s made even worse by the fact that this club is defined by having money or not. I fear that while your intentions are good, I’m not sure this particular post helps the way you think it does.

    I made one of my few comments on Fred’s blog awhile back on a post he did that I felt had the potential for similar unintended consequences. He had posted about employee equity percentages iirc and I just said to him, um Fred you’re whining in public about a few percentage points in the employee equity pool and all that can do is make you look bad (in so many words). This post comes off the same way (although not quite as egregiously). Its basically, here’s some rich guys talking about how they’re all good buddies and helping each other out and giving each other money, etc. I could certainly understand if people might take that the wrong way. My final suggestion to Fred was basically it might not be a good idea to talk about certain things on that forum. Certainly employee equity falls into that category, but I’m wondering whether exposing all this buddy buddy LP/VC interaction doesn’t fall into the same category.

    • Brad’s point, tough, was
      that there are very few VC’s willing to help, and he was thankful for the three that did — all while re-iterating his belief in being a straight shooter and being authentic.

      If you’re resentful at the elite not opening their doors to you with open arms, then I’m sorry to say, but you may have landed
      on the wrong planet.

      I’ve coined a new expression, just for you: if you weren’t born into “aristocracy”, then your only ticket is called “meritocracy”.

      • With respect, you don’t know me. Its not resentfulness. Its a feeling that I need to call bs on stuff on behalf of entrepreneurs, more advocacyish I guess. I don’t know why, I just do it for whatever reason.

        I’ve been involved in many tens of millions of dollars in VC money from the entrepreneur side over the course of time. Its because I’ve spent time connected to this circle and seen the reality of how it works I have the cynical views I have. Brad’s blog has always intrigued me because he goes to efforts to try to make the perception of him different. My cynical knee jerk reaction has generally been skeptical of many of the things he talks about as simply image marketing for him and/or his firm and I’m sure there’s some of that. But living in Denver and observing things on the ground here where he is very active in addition to blogs and such has begun to melt my cynicism a bit wrt at least him. That all said, I stand by my assertion that this posts sounds like an ole boys club doin some backslappin with a cigar and cognac at the Greenbriar or something. Even if it ain’t true, it came off that way at least to me.

        • If this was “image marketing”, I’d have a lot easier way to do it. I’d just hire a PR firm and tell them to buff up my image.

          I have a deep belief in the value of authenticity and transparency. I also have a deep belief in the value of learning and teaching continuously through life. I’m extremely intrinsically motivated by these two things (learning and teaching) and that drives much of my behavior.

          You obviously can be as cynical about me and my motivations as you want. I hope that over a long period of time my actions match my words, and they speak for themselves.

        • Your are definitely cynical. I’m not questioning your integrity, your intentions or your experience, and I thank you for responding back. “You’re entitled to your opinion” is pretty much all I can say at this point 🙂

        • If you’re taking about one particular VC relationship that went bad, then it may just have been bad luck. But If you’ve experienced multiple problematic relationships with different VCs, the one commonality is you. I’m certainly not rich or elite, but I’ve been involved with multiple investors over the years (including Brad) and can’t think of a single relationship that went sour, even if the investment wasn’t successful. I’m generally avoiding the VC game these days, but that’s a lifestyle choice, not an indictment of VCs.

      • Good synthesis @mario_cantin:disqus. Also, I don’t view myself as elite in any way, shape or form. When I start behaving like an elitist prick, someone should kick me in the ass until I stop.

        I try to open my doors to anyone, but using a very clear “give before you get” approach which is the way I try to live my entire life.

        • When I said “elite’, I wasn’t referring to you, Brad, in particular, and certainly not with any negative connotations — just to clarify.

        • ObjectMethodology.com

          “… I don’t view myself as elite in any way…”
          You should. Elite is all about people who take part in getting things done. Elite is about trying even though it looks like you’ll fail. Elite is about taking the insults and the snide remarks and the laughs. Then turning them into energy to go farther and do more. Elite is not about what you have it’s about what you’re willing to put on the line to succeed!

    • ObjectMethodology.com

      ” Its obviously an ole boys club and nothing angers people more than seeing a club they can’t get into…”
      Given the topic of Brad’s post is it any wonder it’s difficult to get in? I imagine they don’t need or want a bunch of people who don’t follow through. It’s very difficult to find people who are *right* for your inner-circle. If your inner-circle are astute, driven, and successful people then it’s that much harder to find the right people.
      Probably most of the people who visit this blog want in. But we don’t get an invite or if we ask we get turned down. I’ve tried everything from offering up ideas to asking about internships. But nothing has come my way. What can ya’ do?

      • “If we ask we get turned down.” There’s a huge difference between asking and just engaging. I’m open about what I do and what I’m interested in. If that interests you, jump in! But just do it – there’s no club here to join!

        • ObjectMethododology.com

          Sometimes I’ve sent emails about how to get more involved and they’ve went unanswered. Let’s not get started on the whole email thing. Suffice it to say I know you return emails. But I don’t know which ones I send that you receive!
          Like the recent giant killer one.

    • Interestingly, during this period, I asked several prominent female VCs for intros. There weren’t many, but I asked the ones I knew. Each said they would help; none of them made any real introductions. So several women (who I don’t think would describe themselves as members of the ole boys club) are included in this post.

      I struggle with your characterization of me as a member of an ole boys club. I don’t belong to an ole boys club and couldn’t give less of a shit about the trappings of anything surrounding something like this.

      I don’t apologize for having money – I’m self made and all of my money has been earned. When I started my first business, we funded it with $10 and built a successful, profitable, bootstrapped company. I also don’t discriminate against people who don’t have money – many of the entrepreneurs I fund and work with have nothing. Many of my friends over the years have worked their asses off to be successful, creating wealth when they started with nothing. And many of my friends have less money than us, and they are still my close friends regardless of the money they have or don’t have.

      That said, I’m white, Jewish, and born in America to two loving parents, a doctor and an artist. I definitely won the genetic lottery compared to many other people on this planet and appreciate and respect that.

      • ObjectMethodology.com

        He’s talking about a “good ole’ boys club.” Way back in the day it would be a group of men. But today it includes women.

  • ObjectMethodology.com

    It always amazes me how people will play games. It’s not just VCs. I deal with it all the time. People set appointments for a call then they don’t answer. People say they are going to send me something and it doesn’t ever arrive. Since I am the kind of person who follows through on what I say. It makes for many trying situations. I’ll make time for a call that doesn’t happen. Or I’ll prepare information for a meeting that is cancelled at the last minute.
    We should all consider that there are times when people who do want to carry out what they agree to just plain can’t. All they really need do is notify the other party!

  • Brad, curious as to how you positioned Foundry Group to LPs coming out of a fund that ‘blew up.’ Correct me if I am wrong, but was it the same mix of partners? I imagine this would be seen as both good and bad.

    • Different partners, but we had all worked together since around 2000 and had learned a lot. I was one of the four Mobius founders. Jason joined us as general counsel and became a partner in 2004. Ryan was a venture partner and would have been a partner if we had raised another Mobius fund. Seth worked for me.

      So the partner configuration was very different, along with many other aspects of our strategy. We spent a lot of time at the beginning of Foundry thinking and talking about what we had done wrong at Mobius, as well as what we had done right, and used that to craft our strategy going forward.

      • Really appreciate this candid reply, Brad. Great to see the success Foundry has experienced!

      • Would love to hear more about the “what we did wrong” part if you’re comfortable sharing it.

  • Fundraising seems to be the same for VCs or Startups. Did the LPs that turned you down give you feedback? That’s another game we are finding. There is some great parallels here for me to take away as we start our fundraising process…create advocates for us!

    • Very very little feedback, and almost none of it actionable. And, in many cases, generic, or not even relevant.

      • “I think you might be a little early for us. Come back in six months when you hit that impossible milestone that makes this decision a no-brainer.”

  • Brad, thanks for writing this. From my perspective, I think it’s super important for entrepreneurs to understand that VCs raise money too. And VCs get their teeth kicked in during that process. It’s not always easy raising a $225M fund! Putting it out there publicly for the entrepreneurs to think about is powerful.

    • Yeah – @philipsugar:disqus said the same thing. Maybe I’ll write more about it.

  • “And, after 90 meetings in the first three months of fundraising, which resulted in 20 immediate rejections and no obvious path to a fund at the end of the first quarter, our appreciation for these three people grew.”

    This is the other side of the coin that sometimes entrepreneurs don’t understand.

    • Yup. Maybe I’ll write more about it.

  • That’s a wonderful story Brad. Both you and Fred set the standards in many respects.

  • Good people find each other. Great post.

  • I am raising a first time fund. It’s a bitch.

    • Indeed it is!

    • How much are you raising? Is it just you? Send me your deck. I can help

      • I will. Deck being updated.

      • I’ve been raising on and off for awhile now too and decided to make some huge changes to my business model i.e no management fees. I’ll loop you and Brad in with my deck to see what you think.

      • What does a good VC fund deck include? Is it mostly invesent philosophy?

        • It varies a lot. Maybe worth a blog post, but like company pitches, there are best practices and things that have impact, but no template.

  • I cofounded a nonprofit to help disadvantaged women become entrepreneurs in one of the poorest states in the US, and we have found the same thing in trying to raise our first scholarship fund. Saying and doing are two different things, and those who step up after offering to help have my deepest respect. No matter whether their efforts come to fruition or not, when someone follows through on their commitment, it says everything about their character.

  • TB

    Thanks for this post.

  • edzschau

    Great post, Brad. A corollary is the startup CEO who launches with a lot of fanfare, attracts a lot of supporters, falls on difficult times and works through ‘the struggle’ to get the company back on the right path. It is through ‘the struggle’ period when a CEO discovers who his true friends and supporters are – encouraging and working with him to get through. To me, that is the defining character of a true friend.

  • gonzaloc

    Brad, it is for posts like this one that I’ve been a loyal reader for many years. Thanks. Keep ’em coming!

  • Jack Tankersley

    Brad- thanks for the shout out but more importantly raising the issue of entrepreneurs helping other entrepreneurs. I am always intrigued when folks do not realize that VC’s who create new “Fund Families” are indeed entrepreneurs in their own right. Many VC’s are builders and are wired to help others trying to build. It was a pleasure and an honor to play a small role in helping you create a truly remarkable firm that focuses on this building process. Just keep paying it forward. JT

  • Nick Laszlo

    Hi Brad – I work with a first time, tech-focused fund in Chicago. I’d love to learn more about your fundraising experience. Any suggestions regarding LPs interested in tech?

    • Drop me an email with more info on what you are doing and I’ll give you a thoughtful response.

  • I’ve always been impressed that SJF Ventures lists their LPs on their website. In EdTech, just finding the names of interested LPs is the first challenge facing new funds (SJF does benefit from its broader social impact mandate). Having helped make potential foundation and family office investor introductions for most of the focused EdTech funds over the last two years, I have only three strong leads for our own first fund raise for later this year (see some of my investments to date on EducatedCapital.com), but hearing thats all Foundry had in 2007 (and knowing we’re going to be raising a small fraction of your fund’s size), provides much comfort. Also, I love seeing all the first time funds out of Chicago on this message board — having worked here since 1999, its been exciting to finally see so many new /growing early stage “funds” (Jump, KGC, Chicago Ventures, HPV, Linden, etc.) — now if we could just get any of them to invest in EdTech (i.e., B2B models).

  • Here, here!

  • Thanks for sharing this. With all the talk of startup fundraising, it’s a nice change of pace to hear about what VC’s have to go through.

  • Good post, Brad. Of course, now every fundraising would-be VC in the world is going to tail-waggingly show up here, roll over, and try to get you to rub their belly. People constantly confuse “No bullshit” with “No no’s”.

    • It’s all fine. I know how to say “no” or “I’m not interested.” I say it 30 times a day.

      • I have confidence in your ability to say No. I just prefer to follow a game theoretic approach in these matters, and make credible commitments to being irresponsible, thus reducing the likelihood of being asked to, you know, help.

        • Eh – it’s easy enough for me to just say no over and over again.

          • Better to be straight than to make empty promises / fake interest. But I’m sure passive agressiveness will never go out of style. There are certainly cases where it is understandable.

      • ObjectMethodology.com

        “I say it 30 times a day.”
        And that’s just to me! lol

  • Just Thinking

    Wow…thank you VC’s have no corner on the “over commit and under deliver market”…back in the early 90’s when I was getting antsy to develop new diesel engine components for the aftermarket (and some O.E.Ms) I would travel the country networking with all the movers and shakers in this very large and very quiet industry.

    I would constantly get company owners to run back into their warehouses and bring back a handful of cartons with greasy engine parts they would dump out all over their desks and say “man Craig you gotta reverse engineer (and patent search) these replacement parts cause we buy tons of them”…after naively (early on) going back home and tooling up to manufacture some of these parts (spending thousands of dollars out of pocket without a single P.O. or commitment (which we made a small fortune doing over and over), I’d get my sales reps out into these companies with these new products that they all bought “boat loads” of just to find their monthly usage could be produced in my plant in about 12 minutes a month (we always ran 3 shifts) to meet their needs…now I will readily admit I was really immature for being so sloppy when I should have nicely pressed them to dig into their system and get specific histories of usage; however, there is this “ya don’t want to push too hard” feeling going when you are tiptoeing into new territory that you are not yet confident in.

    ..now eventually those products volumes grew into very deep (being a manufacturer selling directly into the end users bypassing two levels of distribution) and very wide (selling to distributors from from Ankara to Johannesburg) revenue streams but I sure learned that what people say in a “feel good” meeting needs some serious and sober “fact checking” before blazing forward.

    Thank you for the insight because I have to admit as I am about to launch a start up manufacturing company requiring hundreds of millions of dollars over the next few years setting up small, nondescript, austere, highly automated manufacturing plants across the country (right in the shadow of OEM customer’s plants) to reshore the manufacturing of products that went over seas over the past 20 years, I find I have been naive all over again thinking “over commiters and under deliverers” were indigenous just to the international diesel engine component industry…thank you for the insight into the ethos of some of those in this industry who fail to make their words carry all the weight that they should….seems safe to say people are people what ever the industry…maybe I was spoiled for I sold exclusively to the railroad industry over the 10 prior years and it was an industry where an average customer would buy tens of thousands of engine components each year and the dollars (and profits) were so serious no one dared to jerk around since it was such a small club of super big spenders…it was a distinctively pleasant industry to work in.

  • Ashok Kamal

    I’ve never met Brad Feld – although he’s given me some generous feedback over email. Despite not knowing him personally, I have to say he’s one of the most candid humans – let alone entrepreneurs – I’ve ever witnessed. From talking about relationships to depression to pulling up the skirt on bad actors in his own field, I can only say thank you, Mr. Feld!

    • Thx for the kind words Ashok!

      • Ashok Kamal

        You’re very welcome!

  • Brad – with your 90 unsuccessful meetings, this proves the maxim (which I’ll take credit for if it doesnt exist) “finding” the signal in the noise is hard, “funding” the signal in the noise is really hard.

    • Yup. And it’s clear I need to write a lot more posts about raising our first fund based on the feedback I’ve gotten.

  • How much did Möbius loose and who lost what?

    • We don’t disclose the specific numbers or investors.

      I have publicly talked about them in general terms. Our 1997 fund ($300m) was very successful. Our 1999 fund ($600m) was a complete failure – we’ll return less than 30 cents on the dollar when all is said and done. Our 2000 fund ($1.25b) will end up around return of capital (+/- 20%).

      • With who or what area did you loose the most with?

        • We had over 300 investments so I’m not sure this matters as there were plenty with meaningful losses.

          • Mark

            What is the wind-down process on a failed fund? If you had switched careers, would you still be engaged in VC work on the failed fund 15 years later?

            It’s hard to find information on what happens when a fund fails and the sponsor can’t or doesn’t raise a follow on.

          • It varies. For me, I feel a deep commitment to finish what I started so I regardless of what I did I’d likely still be managing out the fund. Which is exactly what is going on – my partner Jason and I still manage the 1999 fund and 2000 fund.

          • Those were pretty large funds. Does that take up a lot of your time? Or is it mostly wrapped up by now?

            I’m very curious how this works for most failed VCs. Do those without your level of commitment just liquidate and walk away, leaving LPs to deal with their fractional interests?

          • Not much time any more, but it did until 2010. I’ll write a longer post on this at some point.

  • David Brown

    Preach preacher preach. Great post and great list of folks.

    Side note, like this guys name.

  • So, what do you think was behind the BS? Apathy? Doubt? Competitiveness? Distraction? I’ve had some time to reflect on disappointing behavior and stomach that people I made great sacrifices to help purposefully excluded me from opportunities, evaded simple requests (like letter of rec when applying to grad school) and, at worst, actually participated in sabatogue…yet still had audacity to ask for favors and, when they see me overcome adversity /setbacks, try to shift blame and ride my waves.

    I’m incredibly thankful for the inner circle of kindred spirits, but the Piscean idealist in me is baffled by “haters.” Fortunately, I’m not prone to bitterness or grudges, but after ignoring too many red flags and seeing the best in people, I’ve given myself permission to be more selective about who benefits from my direct aaltruism. After chewing on this last part for a moment, I’m wondering if your dirty dozen had been burned by others in the past. Guess we’re all human.

    Nice that you had long-standing relationships to draw from. Like a fly New Yorker’s wardrobe, #QualityOverQuantity. #NeverGiveUp #Patience #Perserverance #EachNoIsCloserToYes

    • I don’t really know what’s behind the BS, but it’s certainly not limited to VCs and fundraising!

  • Having just gone thru the process of raising our first VC fund, I agree with and appreciate the post, Brad. Cheers.

  • Great post Brad. I always appreciate your candid insights. It seems like Fred Wilson is definitely one of the “good guys.” My partners and I are in the fund raising process for our first early-stage fund in South Florida (halfway there!), and we’re working hard to help build the area’s burgeoning startup ecosystem. We are living what you wrote about – hopefully with a similar outcome. Your posts and books have provided valuable guidance for emerging (I hope) VC fund managers like us.

    • Yup – Fred is definitely one of the GREAT guys…

  • Saul Richter

    Brad(and Fred), thanks for the post. Very much appreciate the encouragement. I worked with you and Charley as an Associate back at Softbank when you were raising that first fund and also worked a bit with Fred back at Flatiron. Time flies…. I am now raising my own second fund and plugging away to a first close. 50 meetings down and 50 to go.

    • Hey – good to hear from you! That seems a long, long time ago now…

  • Peter

    Like the line in FG, “Life is like a box of chocolates, you never know what you are going to get.” Some fit your taste, some dont, but they are all there for a reason.

    Cherish life for whatever it is … as life is beautiful.

  • Shaq Abid

    What happens when you execute?

    What happens when you have a path to revenue?

    What happens when you eliminate overheard expenses?

    What happens when you engineer profitability into the business model?

    than you don’t need any BS!


    next customer please,


    *Mr Feld is awesome guy, very helpful, he always replied to e-mails when I was in the basement with nothing but a dream and presentation
    Also read his books, helps alot to learn from the actual VC perspective as compared to academic theoretical perspective

    hustle harder, than tell the VC’s, sorry I’m not looking to part with any equity

    Capture the light™


  • behenchooooooooooood!!!

  • ed.siliconvalley.brazil

    great post – very helpful for first time fundraising.
    We are raising a High-Tech fund for Brazil. Got ~50% funding from local LP’s – rest looking in the US. Any advice from your perspective would be highly appreciated. Do you want to take a look at our deck?

    • Happy to take a look and give you feedback. Just email it to me.

      • ed.siliconvalley.brazil

        done – at your feld.com address – subject: “When Vc’s don’t B…. you”

        • Got it – just responded with some thoughts.

  • JamesHRH

    “We both spoke truth to Microsoft execs, even though they mostly ignored us”‘ should be on Microsoft’s home page.