Top 3 catchphrases VCs like to throw around during the fundraising phase that I find, at least 80% of the time, aren’t true.
- “We move fast.”
- “We have high ownership targets because we provide a lot of value.”
- “We provide a lot of value to our portco’s.”
TBH #1 lie 🙂 Every time this phrase was said— I specifically checked if they “moved fast” & actually came back with a decision when they said they would… 10% hit rate!
Looking back, if they said this, I’d ask “Great! Glad you move fast, so does getting a decision in X days work for you? I’ll follow up then.”
Ownership targets are largely driven by LP returns, NOT by value add. Call 👏 them 👏 out 👏 — “So does that mean if you don’t hit your target ownership, you will provide less value?” Likely not — once they’re invested, the % change in ownership will not change how much they already will (or will not!) “provide value.”
In this phase, VCs still need to sell themselves and will broadly share this statement to get into the round.
The testimonial to trust when it comes to “actual & unique value add” are other founders in the portfolio instead.
But, in general, VCs are only as helpful as we make them. They have a LARGE portfolio and can’t be in the weeds and active which EACH one (makes sense!) So value add* with asterisk of “value add if you ask”!