Free Consulting

I was talking today with an entrepreneur making the rounds on Sand Hilll Road, and he said something that really made an impact on me. He said that the process of meeting with VCs and pitching his business provided him with “free consulting from some unbelievably smart and experienced people”. What a wonderful perspective! If you approach the fundraising process with that mindset, even a VC rejection adds value.

While I agree that successful entrepreneurs need to be persistent and self-confident, there is a difference between being confident in your business versus being unwilling to hear/accept different points of view. With the right mindset, entrepreneurs can view the fundraising process as a collaborative dialog, rather than a pure “let me tell you how smart we are” exercise.

Are you raising money? Take advantage of the free consulting!

Comments

[Jason]

The best entrepreneurs listen. A conversation with anyone (grandma to VC’s) about my product/service is gold dust.

[Hooman Radfar]

Josh, that is absolutely fantastic advice. We just wrapped up a recent financing round and the feedback that we received along the way was invaluable. Interestingly enough, although this trip was fruitful financially, it was our first experience with VCs last year – where we did not raise a dime from them - that helped us craft the positioning strategy that
ultimately won us a ticket to the show. That being said, if they can afford to do so both financially and from an IP perspective, I would advise entrepreneurs to actively leverage VC “consulting” during the financing process. These people are extremely bright and are constantly exposed to the “cutting edge.” If you play your cards right, you could really get more bang for your “financing trip" buck. As an aside, you actually gave us some advice at a Philly Angel Fair that ended up being quite useful when we started in '04. Thanks for the free consulting. :)

[Scott M]

Mentioned this blog post in passing to a smart VC this morning and he laughed, and replied that actually it's the other way around - VCs get free consulting from entrepreneurs, who tell them about where the market is going and what will be the next big thing! It all depends on your perspective.