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Source: Seeing Both Sides of the Table
When you’re building a venture backed company and you raise capital, the raise itself is very episodic. You raise it, and then you move on. It’s a dot.
But the relationships that go into that “event”, or dot, are lines.
Dots are points that accumulate in a “trust bank”, and lines trace the balance.
The first dot
Mark Suster from Both Sides of the Table wrote a great piece on this back in 2010.
“The first time I meet you, you are a single data point. A dot. I have no reference point from which to judge whether you were higher on the y-axis 3 months ago, or lower. Because I have no observation points from the past, I have no sense for where you will be in the future. Thus, it is very hard to make a commitment to fund you.”
Meeting #1: You exist! Welcome to the rolodex. This is where the journey begins.
Something often glossed over is this is also a dot for the investor on YOUR graph. This is a dating process, which means it goes both ways.
Yes, the investor has a bunch of cold hard cash in their bank account. But you also need to assess if they seem like someone you’d want to hang out with and get advice from +3 hours a quarter for the next ~4 years.
After all, while cash be green, it’s also a commodity. Try to gauge what may come with that good.
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