| When you seek venture capital, depending on the | | | | that his firm is interested in being part of an investor |
| size of the round and the appetite for risk of the | | | | group. Finding out on the term sheet that the firm |
| investor, you may end up with an investment group | | | | only intends to invest in part of the round indicates |
| rather than a single VC. | | | | either that the VC is a rookie or that there were |
| During the course of your talks with various VC | | | | some last minute qualms about the investment that |
| firms, ask if they would consider being part of an | | | | caused the partners to back-peddle at the last |
| investor group. The conversation that follows will give | | | | minute. |
| you a variety of information. They will probably tell | | | | A rookie VC may or may not be a bad thing, but if |
| you if they always, sometimes or never co-invest | | | | one or more of the partners is skiddish about the |
| with other groups. If they do, ask them who else | | | | deal, there could be trouble through the term-sheet |
| they normally invest with. If they are interested | | | | negotiations. Try to pinpoint what is making the |
| enough to have you in for a presentation, they may | | | | partners take a lower risk position, so you can |
| be willing to make an introduction to another firm. | | | | reassure them. |
| Also, let's say you get a 'no' from the VC you are | | | | In general, having several well-known firms as part of |
| talking to, but you get the feeling it's a soft no. If | | | | your investor group is a positive. For one, you get |
| you find another company that is willing to lead your | | | | twice the resources for the same investment, |
| round of financing, you may come back to firms that | | | | including twice the industry and future investment |
| normally co-invest with others, even if they have | | | | contacts. Additionally, if you need a second round, |
| already turned you down. Upon occasion, once an | | | | the investors may not be able to continue investing, |
| investment is blessed by another firm, the first firm | | | | but if you have two firms, your chances of receiving |
| may reconsider their position. | | | | additional investment double. |
| The VC should have let you know ahead of time | | | | |