Tales in Raising Venture Capital: One of my War Stories

Last updated on November 16th, 2017

People always want to hear the good, the bad, and the ugly when you’re talking to venture capitalists and raising money for a business. I’m constantly asked for war stories. So here is one that drove me nuts, but is laughable now that the burn is gone. To set the stage properly, most VC’s I’ve worked with are great and this story is more about a consultant than a VC. But here it goes…

When I was first raising money for Seamless Receipts, I talked to a number of venture capital firms and early-stage investors. At the end of one pitch, a VC introduced me to an “independent consultant” who could provide expert advice, put us in touch with early customers, and perform some of the VC’s diligence. The consultant had been a partner at a big firm, had served on the boards of several successful companies, and looked great on paper.

I emailed the consultant to setup the meeting, including myself and my business partner. He responded by forwarding me a dinner reservation at an expensive restaurant in New York the following night. This was rather unusual. We hadn’t even setup a day and time for the meeting and here was a PDF copy of a restaurant reservation. As a scrappy entrepreneur, I tend to eat at restaurants that have dollar menus. But I figured he would pay if he made the reservation. Worst case I’d pay my share and it was a worthwhile expense for his time, which was clearly valuable.

We met for dinner the next day (his schedule seemed awfully flexible). He happily ate his food, but was more interested in the New York party scene than our business. We couldn’t get him to muster up any logical feedback or provide any value during the discussion. Then there was the finale, he left us with the bill for his lobster dinner. I was aghast! This was worse than a pay-to-pitch scheme. We paid for the expensive dinner that this guy set up, he wasn’t even a potential investor, and he had no expertise that I could discern. What kind of “successful” business person makes a young, budget-conscious entrepreneur buy him lobster dinner?


I have a lot of respect for most VC’s and consultants I’ve met. But this was ridiculous. I wanted to launch a nasty email to the consultant and the venture partner who made the introduction, but I decided to cool off and simply move on to my next slew of meetings. I won’t be meeting with him again, and I will give an honest assessment of his character when asked. But it’s a small world and your reputation is more important than anything, so I’m careful with my reactions.

Lessons Learned:

You should approach the fund raising process with the same discipline, focus, and rigor you use to build a product. This means constantly prioritizing your time. There are tons of investors, “experts”, and entrepreneurs you can talk to. There are plenty of people masquerading as each as well. So make a giant list of people and firms, track it, trim it down to those who can be great partners, and spend your time accordingly. Identify the bad apples as fast as possible, toss them aside, and don’t look back. The sooner you develop meaningful relationships with people in the venture community, the more you can triage your schedule (and cut out people who will waste your time), I might have gotten stuck with a useless meeting and a bill for a lobster dinner, but I won’t get stuck twice.

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  • I’m sorry that happened to you. Hopefully someone will learn from your experience. Thanks for sharing.

  • Sam Waltman

    Keith…this story is hilarious. I can’t imagine the guy being that shameless. Thanks for the comic relief though. Maybe that’s another positive that has come out of this experience. Hope you are doing well. Let me know if you are every out in the bay area and we should grab lunch.

    • Haha, glad I could provide some comic relief. I was just out in SF
      recently – I’ll let you know next time I’m in the area.