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More in the 50 Questions Series50 Questions: How can I tell that a VC won’t invest? | How does the structure of the VC industry impact investment strategy? | 50 questions: Should I seek a strategic investor? (or 5 reasons you should avoid a strategic investor) |
50 Questions: To what extent should I encourage competition between VCs?
Together with Nic Brisbourne of The Equity Kicker / DFJ Esprit, I am writing a series of 50 questions you should ask when raising venture capital. We expect the series to run for a year, after which we will collate the answers into a book. We view this as a collaboration, so please comment to help make this series even more useful. This is #49 in the series.
Nic Brisbourne has recently given his own take on the question of investor competition, which I looked at in an earlier 50 questions post on competitive tension. We both agree on the main points; narrow your options down to a few serious investors, and try to get them moving along the process at the same pace, so that you have two or three termsheets to compare. However, the social graces of negotiation are tricky at best, so to learn to skillfully manage multiple potential investors, you should read Nic Brisbourne’s post on encouraging competition between VCs as well as my own post on competitive tension.