Abhishek Anand


How many VCs should you pitch to?

A question every single entrepreneur has pondered on — how many VCs would I need to talk to, before I get a deal?

Originally published on Quora
Reproduced for HackerNoon. Some minor edits for improved readability.
The original question on Quora:
As a startup founder, who would you not be willing to receive funding from?

Whenever a founder (or a founding team) is preparing to raise funds for their startup, one anecdote that gets floated to them is the fact that Airbnb founders talked to a number of investors before they managed to bag a deal. And it’s true. Michael Seibel (founder of YCombinator and Justin.tv) alone introduced Brian Chesky to 7 investors in 2008 (as detailed in this Medium post). As Brian writes in his post:

Below you will see 5 rejections. The other 2 did not reply.

So, these 7 investors passed on the opportunity to get 10% of Airbnb for a seemingly paltry $150,000.

3 of the 5 rejection mails Airbnb received out of the 7 introductions that were made.

Brian ends the post with quite some words of motivation for the founders out there.

Next time you have an idea and it gets rejected, I want you to think of these emails.

Now that. That’s powerful, and indeed words that those fighting endlessly to change the world for better need to hear. To stay in the game, to stay motivated, to not give up.

But, I am here to talk about something different now. I am here to tell you that when you are planning to fundraise, take a step back and think for a while before you start your fundraising efforts.


3 of the 5 emails Brian shared talked of a common theme — “This is not our area of focus.

Sure, investors want to make money, and in hindsight some (maybe all) of these investors would be kicking themselves for not having jumped in on this opportunity (Their investment of $150k would have gotten them tens of billions of dollars). But it doesn’t change the fact that investors typically operate with some focus areas in mind. And there are multiple reasons for that:

  • Some times they have a mandate from their LPs on which sectors they want to get involved in.
  • The VCs make money only when the startups do really well. So the VCs are really invested (not just financially) in their portfolio companies. As a result, you will typically find VCs investing only in market segments they have a good understanding of, and where they think they would be able to add non-monetary value as well to their portfolio companies.
  • Once burnt, twice shy. VCs do back smart entrepreneurs, but every once in a while they would come across companies that looked really promising, but ended up being bad bets. If that has been a case, and if they are seeing other bad bets around them in the same segment by other institutional investors, they may get wary of getting involved in the sector — at least for the time being.

The list of possible reasons could be much longer than that. One of the startups I advise is a liquor wallet, and they were looking for seed-stage investors. I knew of someone who has been investing aggressively in early stage companies, but I also knew that this wouldn’t be a space he would be too keen on — and because of completely personal reasons, not business arguments. So, I did not make the connect. I ran into him at an event last week, and the topic of the liquor wallet business came up. His reaction about the business validated by decision to not make the introductions.

So, do your research. Figure out what are the areas of interest of the VC firm you are planning to approach. And do your research not just on the firm, but also on the people you could be connecting with.

It is quite possible that there are two people at the same VC firm, but while one would be lukewarm to the business, the other could very well be your champion in the company.


If you are an early stage startup, in all probability, you are looking for just one investor right now. So why not make a funnel that helps you filter and therefore narrow down your possibility of nailing that deal?


It goes both ways. You can’t possibly think that any investor is a good investor. Just as a bad hire in your company screws up the productivity of a lot of resources, an investor who is not the right fit can be detrimental to your business.

Sure, you regret blowing a potential deal, but take my words on it — you will regret it more if you make a deal with the wrong investor.

Following the shotgun approach to fundraising (talking to as many investors as possible) may increase your chances of getting funded; it could increase your chances of getting tethered to the wrong investor just as well.

There is a few things which would act as a red flag to me, if I was planning to raise cash from someone:

  1. Their chequebook would be the only value they would be able to add to my business. Running a startup is hard, really hard, and one of the main reasons why I would be looking for an investor would be to enlist their help on some fronts. Obviously at the end of the day, it would need to be the business and I that would need to do the heavy lifting and the dirty work, but I would really be looking forward to helping hand guiding the business as we march forward through the mud. If I am operating in the world of fashion/retail, I would really be looking for someone who (a) understands the intricacies and nuances of the supply-chain processes, (b) can help me get connected to people who may be instrumental in taking the business forward a few notches.
  2. We don’t have the same wavelength, the same thought process — when it comes to the most basic things. Don’t get me wrong — I don’t have life all figured out, and the professional world, even less so. I am always looking to learn from anyone and everyone. But we need to stay strong on the foundational elements that guide our thought processes. If the two of us can’t see eye to eye on those, then it would be a pretty rough ride for both of us. And we are too busy fighting with each other all the time on every business decision, then when the hell would we be running the business? I once passed on an angel investor because of one simple thing — we were focused on doing just 1 thing at the time, and he wanted us to expand like crazy, and some of those things would have been completely misaligned to the business we were into. As I explained why it would not be a good idea to diversify this early, thereby diluting our brand positioning, messaging and identity, his point was simple — “But you will make more immediate money doing this.” Thanks, but I’ll pass. (He was right though. We would have made more immediate money, but it would have been (a) infrequent and largely fragmented, (b) repeat transactions would have been next to nil, and that would have been a recipe for disaster.)
  3. They have a lot on their plate. Okay, this may sound a bit needy, but I am not particularly looking forward to have a VC backing my business who is “busy all the time”. One of the reasons they may be swamped could be a massive portfolio, and that — that is a double edged sword. While that would make the VC quite prolific, and would certainly get you a lot of attention, it would also mean that they would be having little time for you. And you need their time, especially in the early stages. I have seen VCs introduce their portfolio companies to other prolific investors, and some of those emails were written unprompted, without the founders even requesting to make that connect. And the sheer length of those mails, and the thought/time that would have gone behind those made me respect those VCs a lot more. That wasn’t outlier behavior though. VCs are supposed to be aligned to your growth. After all, your success is their success. So, I would want them to have at least enough bandwidth to remember that my business may need a friendly nudge from time to time.

Finding the right ‘first’ investor is almost as important as finding the right co-founder. You guys are going to be in it for a really long time. Make sure this would be a journey both of you will enjoy and support each other in. Divorces are messy for the kids, and here the kid is your dream, your business. Don’t make it suffer because you were impatient and took the first deal you came across.

Originally published at www.quora.com.

That’s it for today. See you tomorrow!

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