The Fundraising Myth Entrepreneurs Need to Stop Believing
Most reputable venture capital firms will include language on their websites describing what stage companies they invest in: seed stage, early stage, growth stage, late stage, etcetera. For entrepreneurs, this information is critical because it helps indicate whether or not their startups would be a good fit with the firm’s investing thesis. After all, there’s no sense pitching a VC firm focused on late stage investing if your company just proved product/market fit and is looking for capital to scale.
Unfortunately for entrepreneurs, some VCs use misleading language. They’ll write something like: “We focus on growth stage startups, but, for the right founders, we’ll invest in companies as early as an idea on the back of a napkin.”
VCs love telling entrepreneurs they’ll invest in ideas, often even using this “back of a napkin” phrase. And, to be fair, I don’t think they’re being intentionally deceptive. They may not even be lying. Heck, if Jeff Bezos wrote down an idea for a new company on the back of a napkin, handed it to me, and asked if I’d be interested in investing, I’d probably sell my house just so I’d have more money to invest.
But most entrepreneurs aren’t Jeff Bezos, and Jeff Bezos isn’t asking VCs for money anyway. Instead, intentionally or not, VCs who claim they invest in ideas are…
