Respecting entrepreneurs – or not

Raising capital is something that almost every entrepreneur must do to, in some cases, simply to survive, and, in other cases, to grow.

vultures sitting on a dead tree

Rarely are companies started that generate adequate funding from its early operations to stay afloat. And, so it was for Dave and me when we started a business some years ago. In the early stages of developing our product concept, it was a win for us to have anybody willing to listen to our pitch. We were starting up in a city where technology companies were the anomaly, not the rule. There was a lot of money around, but it was almost exclusively reserved for those deals that were known in our area and that had made people money from earlier investments, namely oil and gas.

On one occasion, we traveled to an out-of-town meeting with a VC firm with great expectations. The VC was targeting technology deals specifically and had been intrigued by our concept. We had passed the initial hurdle in Calgary and were now to present to the investment committee at the entity’s headquarters. Dave started off the presentation, something that we had carefully worked on and that we felt confident told our story directly and clearly. Almost immediately the financial person started to tap his pencil on a calculator as he looked at our financial information. I could tell that the regular beeps from the calculator were throwing Dave off his pitch, so I interrupted and asked if there was something with which I could assist as the financial area was largely my domain. The financial person responded that there wasn’t, and Dave got back to his presentation. Almost immediately the financial person got back to his tapping and the occasion muffled laugh under his breath.

We got through the presentation and answered all of the questions – and there were a lot. We took this as a positive sign, and we gladly agree to wait outside the room while they held their review as they indicated that they would give us an answer forthwith. And wait we did, as trays of food and drinks were taken into the room for the VC team’s lunch. We could, at times, hear raucous laughter and at other times the full conversation. Mercifully, after close to a ninety-minute wait, they called us into the room and rejected us – clearly and definitively, but with little in the way of input that could help us in future pitches.

Not every company is going to be a match for the types of investments that investors prefer. It is after all the money-person’s money, and there is no arguing with investor preferences, desires and decisions. The only reason that Dave and I found this exchange to be remarkable and why we have remembered it so vividly is because of the way in which the VC team treated us – making noises during Dave’s presentation, laughing about our thoughts and plans and not extending the courtesy of lunch, either allowing us to go or giving us a sandwich.

We wondered then and now if they thought that they were superior to us because they had lots of money and we had little. Perhaps it was their power to say “yes” or “no” to our proposal that made them better than us. Maybe it simply was not thinking to extend the most basic of courtesies to us as they were deliberating on our fate. Or maybe, they had simply had become immune over time to any personal feelings, remaining more in the realm of the tangible and concrete as they checked and rechecked the numbers in our forecast.

Whatever it was, we felt the disrespect in the interaction.

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Nancy Knowlton
Nancy Knowlton is co-founder and CEO of Nureva Inc. and previously the co-founder and CEO of SMART Technologies. She writes about education, entrepreneurship, business management, technology, innovation and other passions.