5 weird reasons for why VC gives us a headache

11 Sep 2014
| Last update: 05 Oct 2015

You know that funny game little girls play with daffodils? “He loves me, he loves me not, he loves me, he loves me not…” Oh well, you get the image. So it is with VCs. Whether you like it or not, you use it as a startup resource or not, sometimes it can really give you a headache. There might be many reasons, but are they weird ones, I’d say? Let’s take a look at my list of 5:

VC

When it comes to VC, it couldn’t get any more weird than this

  1. “It’s because of the zombie VC firms, dear.” It’s a Venture Capitalist that is dying a slow death, and sometimes you fall right in its trap. And what does it do? It slowly starts munching at your startup’s brains: the investments. You might think that after you strike the deal, whether or not the VC is decomposing, you’re out of danger, but sometimes it just doesn’t turn that way: sometimes you might be facing a return of investments. So, isn’t the zombie apocalypse for your startup just weirdly not nice?
  2. Many people have trouble with the ‘funds’ in ‘V.C funds’, you know. Do you want to know why? Because the problem with the “V.C. funds is that they’re funds”, as it’s pointed out in A Unified Theory of V.C Suckage.  The problem is that the VC gets paid a percentage of the money they manage, so you don’t get it all. It all extends to a hammering headache. You need a huge fund, so that every partner needs to invest huge sums of money. If you think of the limited number of deals you can strike, then it adds up that each deal has to be worth a lot of money.
  3. Venture rounds seem to me like an eternal spin in circles! What’s the point of so many series pointing to the bigger ones? You’re probably referring to the A’, B’, etc. series and the AA, BB, etc. series, which indicate small follow-on rounds, integrated in the rounds before. Not to mention the stages in which the process is divided ( check out my article on funding your own startup) is also very complicated, and at times pointless, as in many stages you only expend on what you did in the previous one.
  4. You can get a headache while waiting for hours, days, months…on you chair for VCs to give you an answer. Patience! Patience! Patience! In deals that involve such great sums of money is no wonder it takes so long for them to answer. But your head shouldn’t be caught up in the middle!
  5. Do you have a feeling there’s another pair of eyes grown on the back of your neck? My dear, sometimes VCs are said to steal your ideas. They’ll tell your secrets to your competitors, if they end up investing in them. Sometimes they won’t even want to do business with you, only meet you and pick your brain for their client. Naive founders fall in this trap, experienced ones view this as a cost of doing business. Well, it’s not a perfect equation, but take into account the large sums of money they invest, so they can play by their rules.

So, this seems to be it, dears. My list of why VCs give us a headache. Do you have other opinions? P.S.: It’s just hear-say, rumors, so don’t shoot the messenger!

 

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Ligia Mangra

Content Writer at Squirrly
A passionate writer. I love seeing a full moon and I like to rock 'n roll in life. Can't wait till my first novel gets published. Thumbs up, it'll be a fantasy horror!
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