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“Half of the venture capitalists in Boston have not written a check in the last 12 months.” #unCon


Most funded startups never make it past the initial seed round. What is stopping them? Three of Boston’s top investors – TechStars’ Katie Rae, Matrix Partners’ Antonio Rodriguez, and Eric Paley of Founder Collective – gave a bit of insight into what can make or break a startup aiming to make it to the next phase of funding.

1. Balance is everything.

A great idea is nothing without development. A great product is nothing without marketing. “It takes a fully-formed founder team, both on the engineering and the marketing side,” says Rae. “You have to be both. You cannot be a cobbled-together team. You need true traction and balance.”

2. The (actual) presentation should…

“I know it is en vogue to ‘put away the laptops’ and ‘just talk,’ but you need a way to tell your story,” says Paley. “I’m one of the few guys who still believes in PowerPoint. Quite often, some of the right questions will not be asked if you’re just having a face-to-face discussion. The old-fashioned presentation is a way you can make sure you’re putting everything you need out there on the table.”

3. Learn what works as fast as you can.

If something doesn’t work, scrap it. Learn from it. Rinse. Repeat. “People just  throw things at the wall and see what sticks,” says Paley. “People are getting swings, but not always a ton of at-bats. Little pivots and big pivots. They key is actually to change up your game as early as possible. Taking too long to learn the inevitable. If you learn in a day what it takes others six months to learn, you’ll get more chances to swing at the plate.”

4. East Coast VCs are not always willing to work with one another.

Even with all this talk of Boston’s nurturing startup community, competition will always be in play—quite often when it comes to those looking to fund the next big thing. Most big investors are looking to make an initial contribution of at 20-25%. Splitting it between two funds would mean 10%, and the larger VCs are not willing to go after 10% each round. “Elbows are sharp up here,” says Rodriguez. “Most East Coast VCs are not willing to work with one another. A lot of it has to do with capital intensity and the quality of the partnership, but there are a lot of investors I would definitely be happy to invest with.”

5. Even if you don’t get funding, you can still get feedback.

“Quite often, VCs will give you generic excuses—not enough traction, lack of market,” says Paley. “Frequently these are generally true, but can be thrown out there with much thoughtlessness. But it is a two-way street. Some entrepreneurs can’t take the criticism. If you are open-minded to feedback, and you take it well, it encourages VCs to give it.”

“When I turn a deal down, I try and give specifics, but if you don’t want it, you’re not going to get it,” says Rodriguez. “The worst part of our job is saying no. If your response is a verbal attack, you’re not getting my feedback.

I’ll leave you with a quote…

“Half of the venture capitalists in Boston have not written a check in the last 12 months.” – Eric Paley

Is it lack of business-development balance? An over-abundance of startups in the area? Uncertain economy? Do you think this trend will change Boston’s ecosystem?