I think I've mentioned this about 6 times yet is continues to happen. As in 3 seconds ago.
Here is the opening from a piece of email which just showed up:
"Rick,
After perusing the list of VC players here in Toronto, your firm met the parameters we were looking for to facilitate a $100M capital financing."
Yup. That's a One Hundred Million Dollar capital raise.
I'll cut the entrepreneur a break and not reveal anything more except to simply say don't send mail like this. It really doesn't help your cause, will likely get filed in the round bucket on the floor, and your company (or firm) will rapidly get the reputation you probably don't want.
Don't do this.
[Bonus: Don't attach a full business plan AND some NDA which I won't sign in the same mail that tells me I'm qualified to actually invest. They did, I just finished reading the email. Amazing]
This also includes one of my favorite misuses of the word peruse. It means "to look at carefully" not browse as many people seem to substitute. One could argue the true meaning was intended...but probably not.
Posted by: Eric | October 02, 2008 at 15:28
Strikes me that somewhere in a "brilliant answers to tough interview questions" style book, or the 2008 equivalent, someone has suggested this is absolutely the right way to approach a VC. The arrogance perhaps isn't necessarily surprising but it does seem like every time you mention this type of approach, the quote is almost word for word.
Posted by: Tom | October 02, 2008 at 17:42
Eric, I think the writer (accidentally) used the word "peruse" perfectly: He looked very carefully at a *list* of VC players in Toronto. He didn't say that he did any research into the VCs, only that he looked at their names on a list. :-)
Posted by: Colin Percival | October 02, 2008 at 20:34
What the hell, are these emails from Nigeria? too funny.
Posted by: Tom Purves | October 03, 2008 at 11:46
Rick, I have seen/heard some VC firms willing to sign NDAs with potential portfolio companies - this was the case for a company operating in the alternative energy space.
Any idea why that is ? (Especially since I have also seen/heard alot of VCs, such as yourself, who will not sign NDAs)
Posted by: Harrison | October 03, 2008 at 12:30
Who cares about the NDA, it's not like the executive summary you present to VCs will actually include any of your secret or patentable intellectual property. If you want to protect your startup, or give the impression that you are, do it for real. If someone can actually steal your idea, it means you'll never past the question every VC will ask: How will you remain #1 when other businesses copy you?
Posted by: Alex G | October 04, 2008 at 20:17
Well, I don't fully agree with you there Alex. Doesn't matter if someone steals the idea, as the vision behind it can't really be stolen. A business can easily answer the "How will you remain #1 when other businesses copy you?" question with possible parallels that add to the business idea (by reducing operational costs for example).
You can only copy the current state of the idea when you shared it. No one can steal the drive behind it.
Posted by: Seb G | October 05, 2008 at 13:32
Harrison,
Most of the time confidentiality agreements and NDAs are mangled into this giant pile simply called NDAs.
Once we (JLA) dig into a company, all the work we do is covered under a confidentiality agreement to the extent that we simply promise to keep the information confidential and not share it. We run into issues with documents beyond this limited scope because of the mass number of companies walking into the office with ideas/companies that will overlap/compete, etc. We can't be limited on what we can do given the unknown of the next meeting we are likely to have.
Generally speaking, narrowly defined confidentiality is okay and I can/will sign that. I usually produce the document.
Thanks for stopping by.
>R<
Posted by: rick segal | October 05, 2008 at 17:13