The 10 Commandments of Fundraising Etiquette

I was sitting on a plane on my way to the Valley the other month and the guy beside me was also in the tech industry. We got talking about time management etiquette: how it was all the rage in the late 80’s and early 90’s, and how lately it seems to have gotten lost in the age of mobile.

You remember all the tips, like plan time for yourself, an open office door means enter, a closed one means you are doing real work. Nowadays there aren’t old school offices with walls and doors. Furthermore, it has been a long time since I’ve seen a “time management binder.” But the point is, it isn’t the only space in our work lives where we have lost a sense of decorum and manners.

I have been really surprised lately by the amount of vitriol and the intensity of the entrepreneur attack on the investor community, and vice versa. And it’s pretty much present at any pitch event where the Internet crowd, logo’d tees and all, go to get pummeled by a VC with a stage and a microphone. For the amount of time that an entrepreneur takes to write out a plan, put together a financial model on a spreadsheet, spend money on travel and capital acquisition, sit in the waiting room, and finally pour his/her soul out in a form of organized begging, he or she deserves something more than a dismissive meeting or a nasty public flogging during a Q and A. (Two entrepreneurs asking each other how much they raised should be banned as a conversation).

On the flip side, for the amount of time an investor spends looking at startups and putting wealth at risk instead of preserving it, the time they spend changing their communities by supporting the local ecosystem instead of fleeing from it, and the amount of free coffees they provide fixing deals instead of ignoring them, a little deference could be shown by the entrepreneur community. Instead, over and over again “the idiot” investor gets a flogging on a local startup’s blog, on Twitter, etc.


So here it is, my Ten Commandments for Fundraising Etiquette.

For investors, how to stop being a pompous ass, instead thou shalt:

1. Stop asking questions that don’t lead to cheque writing. In an angel group this means don’t ask a question if you aren’t interested in following up with the company.

2. Have some respect. You remember being in your mid-twenties, sitting in your first investor meeting, probably canceled everything else you had going on that day, sweaty palms, heart pounding.

3. Think about your reply. If you don’t like the business model maybe the entrepreneur should get two positive comments before you start the “don’t quit your day job” speech.

4. Be helpful. I have a rule that the entrepreneurs I meet with will always walk away from me with a meaningful contact or work plan project. Note: this does not mean they are pawned off on a sucker angel or an MBA work project like “tell me the total size of your market.”

5. Disclose relevant information. Mentor capital, broker arrangements, and consulting offers should be divulged prior to the entrepreneur meeting with you.

This advice is intended for your standard angel. I think there is a different checklist for investors who do this full time or have infrastructure. The issue of mentor capital isn’t an issue and going for coffee full time, that’s simply part of the job description. For that group I would add the commandment, “Thou shalt not waste an entrepreneur’s time if you are in the zombie period of your fund management or personal cycle.”


For entrepreneurs, you are not the centre of the universe. I have a friend who repeatedly says, “entrepreneurs and deals are like a bus, wait 10 minutes and the next one comes along.” With that in mind, instead thou shalt:

1. Be aware of an investor’s time the same way you worry about your lawyer’s time. How much do you want to use up?

2. Show some respect. You are most likely going to lose this person’s money, but you’ll ask anyway.

3. Do not assume that if an investor doesn’t participate in your deal it does not mean they “don’t really have money”, or that they are an idiot.

4. Understand that it’s actually okay to say “I don’t know” or “we really need help with that.”

5. Realize that the relationship between an investor’s capital and your bank account is directly related to the credibility of your management team, the number of customers who have validated your product, the other interested investors, and how well the amount above is documented. Ask if you are okay with this and respect this.

So why did I write a touchy-feely article on respect in the startup ecosystem?

Because the truth is that as investor you get less quality deal flow if entrepreneurs have you pegged as unhelpful, unreliable, don’t write cheques etc. In fact as a VC or an angel, I believe there is a direct correlation between the quality and amount of deal flow you see and the startup community’s sense of your worth. That is true for entrepreneurs as well. Your ability to get an investor meeting is tied to what you have accomplished before, what you’ve said in blogs and conferences, and what you’ve shown to the startup community.

You know maybe we should all go back to wearing suits again, simply as a way to say “I respect the value of this meeting.” It’s kind of weird to live in a world where athletes and rappers are better dressed than business types- on both sides of the equation.

Originally published in April 2013.