When you take venture money, you’ve got to assume you’re signing up to work with someone for a period of years. The relationship better work because more likely than not, you’re going to go through some rough times together.
One quick test I think about (and I encourage entrepreneurs to think about as well) is to ask the question, “if I see this person’s caller ID on my phone, am I excited to pick it up or do I let it ring twice, take a deep breath and then answer the phone?”
Sounds trite, but it’s a good shorthand way of thinking about the issue of compatibility.
Another thing I feel I’ve learned over the years is that “every interaction is prologue” to the way a person will behave the in the future. What does that mean? I used to give people a lot more benefit of the doubt in early meetings if things didn’t go well. Let’s say the person didn’t pitch well. I used to have thoughts like “maybe they were nervous.” If they got defensive when being asked tough questions, I used to consider that perhaps they were feeling unfairly pushed in front of a group of people.
I’ve come to realize that you’re much better off not making excuses for the person. In 99 out of 100 cases, if someone had a bad pitch, they likely don’t pitch well generally. If someone stumbled on a set of tough questions, then they probably aren’t good under pressure.
I know it can sound harsh, but this is a far simpler way of making decisions (and, IMHO, far more accurate). Make fewer excuses for people and you’ll make better choices about who you work with.
Lest you think this is about investors evaluating entrepreneurs, it should *definitely* go the other way. If your VC is late for your meeting, they probably don’t run on time. If they’re late replying to emails, that behavior will probably continue.
People are as they seem from the first interaction (for the most part). When deciding if you want to work together, make fewer excuses for them and remember the called ID test.
You’ll be much happier you did.