As I was writing my post about VCs who use fear tactics on founders, I found myself making a list of qualities of good and bad VCs.
Since we just raised a round at AirGarage, I wanted to share some heuristics that might help you think about what to look for in a VC.
• Invests regardless of confirmed lead or if firm XYZ is in
• Low partner to company ratio (pro-tip - ask how many companies they are working with / on the board of!)
• Passionately positive references from portfolio founders - some examples i've heard:
- Drove to our office at 11pm from South Bay when we got shut down
- Connected us to new customers!
- Got me out of Chinese jail (not sure the story)
- Got us the best lawyer when our co-founder's visa got stuck processing
• Previous founder experience
• Helps with hiring, fighting regulations, key introductions
• Waiting for lead investor to wire
• Anything but amazing founder references
- "Yeah...she's been pretty decent"
- "Not the most experienced but he works hard"
- "He's was involved a lot at the beginning but he's just super busy"
- "I mean, she tries to help out but mainly just brainstorms with us"
• Makes promises to intro you to firms / customers after you let them invest
- "We usually only make these types of intros to our portfolio companies, once you've signed the term sheet"
• Unresponsive when you first reach out, then wants in later once round gets hot
- Pro-tip: use something like Docsend so you can see if its true when they claim "this deck got buried in my inbox"
• Sends swag and freebies - this is actually a psychological sales tactic where you are given free things and thus feel indebted. Similar to how time share sales work (free dinners)
• Promises extras - some extras can be nice, but don't pick a VC for the free office space.
• Subtweets founders on twitter, upset they didn't get in on deals