“I wanted to do the deal but i couldn’t convince my partners” isn’t an Explanation, it’s an Excuse

While this hasn’t happened to any of our portfolio CEOs in a while, there’s one reason for a VC passing on a funding round that just sets me off: “I wanted to do the deal but couldn’t convince my partners.” This isn’t an explanation, it’s an excuse.

If you are a check-writing partner at a venture fund and you offer up this sentence to a startup CEO it means one of three things:

a) You blew the process by not enrolling your partnership

b) You didn’t want to put your neck on the line in the face of some resistance

c) You never believed in the first place, and are blaming your partners versus just passing

When I’m on the cap table I can help a founder navigate this to try and avoid going the distance with a potential investor. And if you’re a GP with tough firm dynamics, I can maybe help you navigate those. But if you put founding team through a full diligence and take them to a partner meeting, only to come back with this, RIP.

On the flip side, I do think it’s is fine for a VC to honestly say things like “we’ve got a lot of institutional scarring around your vertical so I’m going to need a little more time and help to get my partners comfortable.” Or…