Painful truth on why venture capital firms reject startups

Josh Breinlinger, VC, decides to tell budding entrepreneurs exactly why he won't fund them. But sometimes he lies.

flickr/Steve Snodgrass

Reacting to criticism that VCs are jerks because they don't follow up, Breinlinger set out to accept every pitch request and give honest feedback to rejected proposals. Number One reason is the CEO / Founder doesn't have the experience or leadership skills needed. Next is the team, either co-founders or other execs, who don't measure up. But some didn't like the hard truth, so Breinlinger started telling them things like, "We need to see more traction."

Three years ago, Healy Jones wrote, "It's not me it's you: the untold reasons startups don't get venture capital." The main reason? The founders, especially for those who get lots of meetings but no money. That means good idea, bad exec. VC partners have to work closely with the companies they finance for years, so if the founder doesn't inspire confidence, the checkbook stays closed.

I can handle the truth

if I was in the shoes of the founder, I'd definitely want to be told that I am lacking skills or gave a terrible presentation even if it resulted in a tense or confrontational conversation.

Peter Holcomb on

If you keep in mind that VCs are situational liars, then you can separate the mercenary deal-chasers from the real value-added partners.

rexreed on

start out telling EVERY candidate that the problem is them, not the idea...and then filter the candidates who respond well to the feedback!

Travis Smartflix on

If you're just unable to accept rejection, then well, there's your first problem.

jayliew on

VC voices

One of the hardest things I had to do one time is to tell a founder that I thought he was playing far too fast and loose with the facts, and that it would come back to bite him.

Chris Yeh on

As I mention in the post, you may very well not want to change leadership at your startup, but it is at least helpful to know if that is the unsaid issue…

Healy Jones on

We also often related to the lack of an unfair advantage, saying that by knowing their idea we could have assembled a team ourselves and do it better given our skills.

Stefano Bernardi on

VC backlash

I hope I can build my company without having to deal with two-faced VCs.

Roy Gavish on


Mike on

The tech industry seems to be going through growing pains with respect to sexism, but ageism is apparently still widely acceptable.

shard on

If your startup problem was you, would you like the VC to tell you that fact?

For the latest IT news, analysis and how-tos, follow ITworld on Twitter, Facebook, and Google+.

Now read this:

Developer declares 'I am done with the Freemium Business Model'

Khan Academy offers JavaScript as their first computer language

Study says Facebook profile can predict job performance

ITWorld DealPost: The best in tech deals and discounts.
Shop Tech Products at Amazon