There is a lot of animosity towards VCs, even the good ones.

The industry is designed in such a way that forces them to be portrayed as bad guys more often that not. In order to do their jobs well, most VCs are forced to fund less than 1% of the companies that they see. So, they’re saying “no” to most of the entrepreneurs they meet (no matter how much they like the people). To make matters worse, entrepreneurs have an emotional attachment to their business ideas – they consider their companies their babies. As a result, they often take criticism personally.

If you put these two facts together, to be successful a VC must offend (to some degree) 99% of the entrepreneurs that they meet. Imagine if you lived in a world where you have to tell 99% of the moms that you meet that their babies are ugly. It’s an unfortunate part of the job to say the least.

The takeaway for entrepreneurs is that they shouldn’t take rejection too personally. The venture process can be painful because there are numerous factors that influence a VCs decision – even good startups receive a fair amount of rejection.  Nobody likes this part of the process - not even the VCs.

Comments

[FN]

Mark, the point you make is true, but I don't see it as different than most other businesses, startups included. I'm certain that I've done business with less than 1% of the people that have cold called trying to sell something. Heck, even consumers respond to a comparable amount of advertising and I don't think that sets them up to be "bad guys." 99% of babies *are* ugly! Bottom line, it's not the job you have to do, but rather how you do it that differentiates a good guy from the bad. I've worked with a lot of VCs and there are definitely both types!

Keep up the good work...I enjoy reading your blog!

[Rob]

Entrepreneurs must have thick skin. With vendors breathing down your neck, clients wondering why to choose you, family tension, friends wondering where you are, marketing choices, hiring dilemma's, 4 hour sleep patterns....

Come on! VCs are just ONE of the reasons why being an entrepreneur is hard. Fact is that not everyone is cutout to be an entrepreneur. If a VC is the reason why a vision is not achievable, and results in you placing the blame on that person, you have bigger problems.

VCs may be the bad guys for many "trying entrepreneurs" but I believe good entrepreneurs understand the odds of working with VCs and the exact position that Mark has layed out.

If anything, VCs usually are a screened, more professional breed. I have walked out on some the real bad people on the angel investment side. That's a whole other story and this comment is getting too long..

Great post Mark!