The VC Version of Kick the Can
I got an email this morning from an entrepreneur that I know that has been trying to raise an early round from a "seed VC investor" for the past few months. He’s put together (and closed) a decent angel round and left it open for this seed investor.
This morning the entrepreneur was told by the VC that they are "postponing their decision on investment until a future round" because one of the partner’s friends at BigCo "isn’t comfortable with the direction the startup is headed."
I asked the entrepreneur who the person at BigCo was. I know plenty of folks at BigCo in the relevant area and wanted to do a reality check for the entrepreneur. He responded that the partner at the VC firm wouldn’t say – just that it was a good friend.
I told the entrepreneur to move on and not worry about it because I put this in the "VC kick the can" category. Given that data above, I don’t think the VC was ever serious – if they were at a minimum they would have connected the entrepreneur up with the person at BigCo.
Remember kick the can? It’s a game that is mildly entertaining but fundamentally pointless. You play it because you are hanging out, have nothing better to do, and feel like playing a game is better than doing nothing (with my apologies to children all over the world.) For whatever reason, VC’s play this game with entrepreneurs all the time.
I’m sure I am occasionally guilty of it but I try really hard not to be. The best move for an entrepreneur – when they find themselves in a game of kick the can – is to pick up the can and say something like "so – are you serious about funding us or not. If not, just tell me. If you are, what do we need to do next to get to a deal?"
Dear entrepreneurs: Just because your VC can’t seem to make a decision doesn’t mean you should be an enabler. Kick the can usually ends when everyone gets bored of playing.