Leave the Series A on the Nightstand
My friend (we’ve met twice, so I can call him that right?) David Tisch brings about a point that I wish I could drill into the heads of more founders – Your relationship with your investors is not a one-night stand.
He’s talking, of course, about the subject du jour of the Series A crunch, which we’ve seen discussed all over the place lately. (As an aside, this is the smartest writing I’ve seen from Pando Daily since its inception, and something I hope that they do more often.) Alexia Tsosis of AolCrunch takes things a bit further, examining all of the pieces. It’s worth a read.
The fact is that nobody wants to do the morning-after walk of shame. That is precisely the issue that is facing Y Combinator, and it’s almost to a T an issue that I raised back when the YC/SV Angel deal was first formed.
As is true with every partnership that you form in your life, choosing the right people and then nurturing that relationship is an integral part of the process. For many companies who took the money and ran, there are about to be some big issues when they need that Series A or Bridge round.
Founders have to think of their financial backers the same way that they do mentors, trusted advisers and friends. When you’re suddenly in a tight spot, you don’t call a stranger. You call someone who has a vested interest in their relationship with you. Needing money when you can’t get money? That’s the tightest of spots a company can face.
Your Angels, VCs, funds and the like are in this deal with you for the long haul. Yes, at the end of the day it comes down to that bottom line, but if they didn’t want to invest the time or effort then they wouldn’t have invested the money. Stop treating them like the hookup that you grabbed at the bar. Wake up early, make them breakfast and get ready for a long-term relationship.