OUR VC FUNDING SAGA, AND 'VC GHOSTING'

We at Leanworx just tied up with YourNest Venture Capital?for funding.

For fellow founders and funders, here's the story of our funding journey in brief - the good, the bad and the ugly.

This was the story in the vast majority of our interactions with VCs: Submit an online form. 95% of the time you get no reply, neither a Yes nor a No. When you get an email with an expression of interest, you pitch your deck to a junior person who has no clue about what you are saying, has done zero homework?on your firm. After this, if they are not interested, you just get no?reply at all (it's called 'ghosting' in dating parlance). In the rare case that the junior person understands what you are saying, you get to talk to a partner. Here again you mostly get a repeat of the story of ‘no homework’, ‘no clue what you’re talking about’. You do not get any feedback on what they think. And then you get ghosted. In Leanworx we actually coined a new term for this: ‘VC ghosting’ ??.?

In contrast, this was our experience with YourNest: We started talking in June 2024. The process consisted of a series of Stages, 3 stages online of online forms and another 6 of online meetings with partners in the fund.?I filled in an online form, got an email the next day to say that we were shortlisted. Over one week we were asked to fill in 3 such online forms asking for more detailed data, and each time we got an email saying “Congratulations on advancing to Stage XX”. After these 3 stages, we had a series of 6 online meetings?directly with partners, each?with experience in different aspects of running a business - finance, marketing, sales, technical, etc. In every meeting, the partners had done their homework on aspects of our business that related to their area of expertise. Each meeting was 45 minutes, and at the end the partner would say that he was recommending us to the next partner. The meetings were every 2 days. After 6 such meetings, a partner visited our office in Bangalore and met all the founders. In just 1 month from the day I filled in the first online form, we got the term sheet.

The process was fast, communication was clear and immediate, and there was respect for the founders.

We are a Deep Tech firm in Manufacturing. B2B, SaaS, IoT, Cloud, AI, Analytics. Our product is esoteric, and needs specialized knowledge to understand the problem that we address, the technology, the market and GTM strategy. It must have taken enormous back-end work by the partners of YourNest and their support team to acquire this knowledge. Spending time and money on this shows respect for the founders and the team of the startup. We saw respect in many aspects of this funding journey: The speed, the instant feedback, the homework for meetings, understanding our point of view during negotiations?on the term sheet and SSHA.

What is the key ingredient that YourNest and a few of the other VCs we spoke to have, that results in a pleasant experience for startups ? I think it is the fact that the VC partners have founded companies themselves or been part of a tough growth journey in companies that they worked for. They therefore understand the pain of creating something from nothing. This gives them empathy and respect for startup teams.

If you are a founder looking for funding, maybe this ingredient is something that you should look for in any VC that you want to talk to: have the people founded companies themselves or been part of a tough growth journey in companies that they worked for??

If you are a VC, a ‘No’ at any stage is perfectly acceptable, but please just have the courtesy of saying ‘No’ via email instead of ghosting.?For readers of this article: If you are one of the VCs who took the trouble to say ‘No’ to us instead of ghosting us, thank you for the courtesy and the time.

P.S.

1.?My ultimate horror story of lack of respect is when a VC called me for a meeting at their office, and the receptionist told me that the team was busy in another meeting in the conference room. I waited for 1 hour before being summoned in. I found that the room had a snooker table, and 3 guys were putting away their cues after a round of snooker. There were remnants of a takeaway meal. So I had been waiting for 1 hour while these guys played snooker and had lunch. During my pitch talk of 15 minutes, two of them were nodding off to sleep. There were zero questions after my pitch?(obviously).

2.?Ghosting: A term that describes the practice of suddenly ending all communication and avoiding contact with another person without any apparent warning or explanation and ignoring any subsequent attempts to communicate. It actually originated in 2015, in dating. Now it is also used in friendships, and with this little article of mine, in VC-startup relationships too.

3. The person in the picture up there, ghosted by the significant other, is wondering "Why aren't they replying to my emails, phone calls and messages ? Will they get in touch ? Should I hang around waiting for them, or should I move on to someone else ?". Sorry, this is the most appropriate picture I could get for this ??