005. SHITS

VC Minute
Show High Interest Then Stall - the VC strategy you hate.

VC Minute – quick advice to help startup founders fundraise better.

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Let’s talk about the SHITS. Ah, nothing like a little potty humor to get your attention. And all seriousness SHITS is an acronym I heard along the way that perfectly describes the VC slow roll.

It stands for Show High Interest Then Stall. This is a legitimate venture capital strategy. Well, it’s less effective in these current fast, close environment. But it still happens with great frequency throughout the country.

The rationale behind this, from the VC perspective, is that before I write a check time is my ally. As soon as I write a check, time is my enemy. As long as I’m on the sidelines, I’m gathering more information about you, your company, your competitors, your traction, your team, the market, everything.

The more that I sit. The more that I can wait. And the more that I can gather.

An investor may be genuinely interested, but if there’s no need to commit to around, they’re going to sit on the sidelines and wait. And watch.

When an investor has true conviction, they will give you a firm. Yes. Or a firm No. Or maybe even a conditional yes. Such as, as long as we can hit our ownership percentage we’re in, whenever you get a lead.

Unfortunately the most likely scenario and the one you’re probably most accustomed to getting is the SHITS.

This is not necessarily the mark of a bad investor. It’s just one that lacks conviction about your company right now

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Rich Maloy

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