Is it just me, or is there an air of desperation whenever web startups are talking to venture capitalists (VCs) at events? I’m not talking about the formal meetings with VCs, rather about those informal meetings over coffee or in the breaks.
Was interesting to sit there at Le Web 08 and watch people lining up for an informal chat with the VCs. What has been interesting is the obvious tension in the startup folks as they wait. The tension is palpable.
I’m not sure that this kind of desperation makes for a healthy relationship. We know that in personal relationships where one person is more desperate for the relationship than the other it often tends to be dysfunctional.
People in startups are passionate about their product, that’s why they are doing it. But they’re not often exactly clear eyed on the commercial potential of their product.
More than anything this dance reminds me of dating. And dating is where people try to attract the other person by being or seeming to be what they are looking for. But for investment purposes surely we need a less subjective approach? But then I question if truly objective means of assessment are possible or valid.
Had dinner with some entrepreneur buddies in Paris recently. They reported that they’d checked out approximately 40 startups for investment potential. Of those only 4 had demonstrated any real potential in their view.
This made me think that we need to find better ways to assess the potential of startups. We also need better ways to assess different startups against each other – so we can decide for one or against the other.
I’m very interested to hear about formalised assessment methods for startups and venture capital investment so please let me know of any.