VC Minute – quick advice to help startup founders fundraise better.
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When it comes down to it, pattern matching, in a healthy form, is nothing more than projecting past experiences onto the current situation to make a decision.
What often comes out of this are unusual data requests during the due diligence process. This is more prevalent in Series A and beyond when you have more data to share, but it’s not uncommon at the Seed stage.
I heard from one executive at a startup that was raising a Series A. Mind you, this was the finance executive, not the CEO. And he was getting some strange, urgent requests from the CEO. Metrics that they didn’t normally track or analyses that they don’t normally do. He was jokingly referring to this as getting asked, “What are our expenses on Tuesdays?” “Tuesdays?” “Yes, just Tuesdays.”
What’s going on behind the scenes is that the founder is presenting to an ever-increasing group of investors at one firm. If the process is going well, you’ll meet more and more of the team until you’ve met everyone on the investment committee and a smattering of analysts, associates, VPs, principals, and everybody else. As more people get involved, more past experiences get called upon to analyze the current opportunity.
If one partner had an experience where a startup blew up because every Tuesday they spent a, but jillion dollars, Well, then you get requests for Tuesday Expenses.
If you’re getting asked about Tuesday Expenses, know that someone in the firm has some experience with that, whether good or bad. Use this as an opportunity to learn about why that is of interest to them.
As the CEO, your job is to answer these queries with swiftness and aplomb. But it also helps to share with your team why they’re being asked for Tuesday Expenses.
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