"I don't know of a single VC investment that began with an associate cold-emailing a startup."
I can vouch from personal knowledge that this has happened a number of times at a number of different European VCs, and at least once with a major US VC in the last year.
I'm guessing it's far less common for YC startups because YC startups have demo day which essentially initiates the process. They also have a strong network because of YC so it's much easier for a VC to get a warm intro to any YC startup.
It may just be a Europe vs US thing but I'd be surprised if it didn't happen frequently in the US as well especially at less well connected startups.
Certainly referrals have significant value but most major VCs will be able to use their network to get references on pretty much any startup in any case.
I read "associate" as the more important part of that sentence than "cold-emailing." So, just to clarify, you're talking about a cold email from an associate vs. a partner?
I interpret it as distinct - the junior employee. He refers to the partners subsequently, though still advising to delay (rather than skip) the meeting.
If you get cold-emailed by an associate at a VC firm, you shouldn't meet even if you are in fundraising mode. Deals don't happen that way. [5] But even if you get an email from a partner you should try to delay meeting till you're in fundraising mode.
And from the footnotes:
[5] Associates at VC firms regularly cold email startups. Naive founders think "Wow, a VC is interested in us!" But an associate is not a VC. They have no decision-making power. And while they may introduce startups they like to partners at their firm, the partners discriminate against deals that come to them this way. I don't know of a single VC investment that began with an associate cold-emailing a startup. If you want to approach a specific firm, get an intro to a partner from someone they respect.
It's ok to talk to an associate if you get an intro to a VC firm or they see you at a Demo Day and they begin by having an associate vet you. That's not a promising lead and should therefore get low priority, but it's not as completely worthless as a cold email.
Because the title "associate" has gotten a bad reputation, a few VC firms have started to give their associates the title "partner," which can make things very confusing. If you're a YC startup you can ask us who's who; otherwise you may have to do some research online. There may be a special title for actual partners. If someone speaks for the firm in the press or a blog on the firm's site, they're probably a real partner. If they're on boards of directors they're probably a real partner.
There are titles between "associate" and "partner," including "principal" and "venture partner." The meanings of these titles vary too much to generalize.
we need to combine individual experiences and create a curated tabular list of investors classified by different dimensions in pg's great article. such a list combined with this article would be the ultimate cheatsheet for fundraising.
The main problem with such a list is that the experience with an investor is very subjective and you need to get a lot more information about the said situation in order to assess what really happened there.
I imagine people will likely contribute to such a list only if they are anonymous (The bay area is very small and you don't want to upset investors).
It kind of reminds me of thefunded.com where I find little value in the reviews since I have no idea who's behind it and what was the situation that led the entrepreneurs to leave that review.
Where can it be very valuable? When you have a small network of peers who trust each other (an accelerator for example) and are willing to share more details on the interaction with the investor (and could possibly take a call if needed).
I also believe that YC has a secret list of all of the investors with some comments from the staff (I also know that startups are asked to give some feedback on interaction with investors - that list is probably a curation of the feedback given).
When dealing with an investor I always ask them to provide me with 2 references: 1 entrepreneur they backed who is doing well and 1 entrepreneur who is not doing so well (that helps me understand if the investor is helpful when things are not going so well and believe me there will be some point when things will be a train wreck).
Additionally I always end up pinging my network and doing some backchannel references on the investors knowing that the references they are providing me are probably curated.
That is an excellent idea and barring a pile of non-disclosure agreements I could see a lot of people contributing to this.
Deal details with investor names attached are not likely to materialize until long after the fact and even then someone is breaking a promise, which professionals with ties to VCs are not going to do. Founders could technically get away with this, especially if a deal fell through but this world operates largely on reputation and such a thing could easily pop up at a moment when you really don't need it later on.
Crunchbase has quite a wealth of info in it, as does duedil.com , those you could use to get an idea of who is on the other side of the table as well as google. The best source of info for a company looking for funding from 'party x' is to go and find out who else 'party x' has invested in and then to see if there are connections that can be sounded out off the record as well as companies that 'party x' was going to invest in but where the deal fell through (this is a lot harder to come by though).
You should absolutely do this, always speak to founders of companies who've raised money from a given investor before taking money from them. You can also ask investors about other investors (as in "have you co-invested with X before, would you ?").
I can vouch from personal knowledge that this has happened a number of times at a number of different European VCs, and at least once with a major US VC in the last year.
I'm guessing it's far less common for YC startups because YC startups have demo day which essentially initiates the process. They also have a strong network because of YC so it's much easier for a VC to get a warm intro to any YC startup.
It may just be a Europe vs US thing but I'd be surprised if it didn't happen frequently in the US as well especially at less well connected startups.
Certainly referrals have significant value but most major VCs will be able to use their network to get references on pretty much any startup in any case.