I never had a great appreciation for the temptation to revise history until I became a VC.
We all do it. VC’s say “I knew that was a bad investment” when one of their partners’ companies is struggling. Or we say “I should never has passed on that deal” when we really never had a chance to invest in that company anyway.
This is really tempting when you are fundraising, either as a VC or an entrepreneur. When I meet an entrepreneur for the first time, I’m completely at a disadvantage. The entrepreneur could have done a hundred crazy things as a founder over the last two years, and I’d have no clue unless I do due diligence or have been tracking her for a while.
This is even true for companies that I’ve backed. I was meeting with the founder of one of our portfolio companies, and we were talking through his product roadmap. There are some very exciting things coming for this company – we were both fired up. But halfway through, I realized that we were rewriting history a bit. “Hold on a sec” I said “Let’s just be clear – we took a shot on goal earlier and it didn’t quite work out, right? Can we talk a bit about how that is informing what we are doing now?”
The favorite pitch that I’ve heard in recent months was from an entrepreneur that could have completely revised history with me, but chose not to. The company he was building was interesting in its own right, but how he got there was ugly, wandering, a bit amateurish, and frustrating. It made me LOVE this entrepreneur. He told me about how he naively listened to investors and advisors that kept stringing him along and jumping through hoops (literally making him move across the country). He told me about getting mugged multiple times, having a co-founder disappear into thin air, changing course dramatically, and then grinding it out to a very interesting place. I loved the honesty, and my esteem for what he had accomplished was greater as a result.
One of the best pieces of advice I ever got was “authenticity works”. It’s true! The reason I love being a VC is that I get to listen to an entrepreneur’s story, and be part of helping to continue writing it – twists and turns and all. I hope the founders I meet are willing to be intellectually honest with me. Seed investing is what we do – we usually finance a company and try to set a budget that allows for multiple shots on goal. And if it’s time to call it quits or start over completely, I think I’d rather be a part of the new thing than trying to salvage something the entrepreneur isn’t completely fired up about. Some pretty good companies have come out of these sorts of restarts, but they all start with being intellectually honest about things that didn’t work.