Dear SaaStr: As a Startup Founder What Was The Worst VC Meeting You Ever Had?

Dear SaaStr: As a Startup Founder, What Was the Worst VC Meeting You Ever Had?

As a startup founder, I have pitched to over 150 entities throughout my career, both as a startup executive and a founder. Now, having been on the other side of far more than 150 meetings as part of SaaStr Fund, I have seen the fundraising process from both perspectives. Raising money is often compared to selling stock, and it requires a sales mindset. Startups must expect rejections, hesitations, and conditional interests from potential investors. If you cannot handle 50 doors being slammed in your face to secure a single yes, then sales—and by extension, fundraising—may not be for you.

For the most part, I have been resilient to the challenges of fundraising. However, there was one set of meetings that left a lasting impression on me. It was an experience that felt like the deck was stacked against me, making it the worst of 150 for me.

The story begins with two top-tier venture capital (VC) firms that were interested in our startup. We scheduled back-to-back pitches with these firms, hoping to secure funding. The first meeting went well. All the partners attended, a strong sign of their commitment, and there was productive discussion about deal size and structure. We left the meeting feeling optimistic, and even enjoyed lunch on Sand Hill Road, the heart of Silicon Valley's venture capital scene.

Our second meeting, however, was a different story. As we entered the office of the second VC firm, the partners greeted us with smiles. They mentioned that they had already spoken to the first firm from the morning and were "very excited to dig in." This seemed like a casual observation, but it sent a chill down my spine.

The realization that these firms had communicated with each other before our meetings felt like a subtle form of collusion. While it is not uncommon for investors to discuss startups among themselves, the fact that they had already shared their thoughts made the process feel more challenging than it should have. It was as if the opaque system was rigged against me, and the sales pitch was no longer a fair competition.

In the end, neither firm extended a term sheet to us. While this was not the end of the world, it was disheartening. I believe that each firm's valid concerns likely compounded each other, and one firm talked the other out of investing. It is possible that the second firm's enthusiasm was dampened by the first firm's reservations.

The second hardest part of VC pitching, I realized, was not just the sales aspect but the feeling that the system was stacked against me. For 99.9% of startups, fundraising is already a tough sales challenge. The sense that the process was not entirely fair added an extra layer of frustration.

This experience taught me that while startups must be prepared for rejection and competition, the feeling of being at a disadvantage can be particularly challenging. It is essential for founders to remain resilient and focused on their vision, even when the odds seem stacked against them. In the end, the ability to navigate these challenges is a testament to a startup's strength and determination.