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How not to pitch your business

I had an exchange with an entrepreneur last night that I couldn’t resist posting (I did resist including the guy’s name, however). It started with a relatively typical email. One which I wonder why I still receive but still get regularly. The entrepreneur writes:

Seth…..I’d like to pitch you on a start up. I need the help of someone like you. I haven’t filed any patents yet and I need a nda signed. can we do it?

I respond as I do for all requests like this by saying:

Hi [name redacted]. Like most VCs I don’t sign NDAs (see: http://www.sethlevine.com/wp/2008/01/why-i-dont-sign-ndas). Let me know if you’d still like to show me what you’re up to (totally understand if you feel it’s too sensitive).

Here’s what I received in response:

Seth….I’m reaching out to you here, lets get off this old cookie cutter vc "don’t sign nda’s" attitude, it’s only until the patents are filed. I believe I’ve got one of the biggest deals to come down the pike in years. This isn’t my first rodeo. Just FYI, no matter how hard you crunch the numbers, this is a 20+B per year deal. I already have demo software and I need you to help me put a team together, the money will come as soon as we are able to "show and tell" so to speak. Please reconsider.

Really? That’s how you’re engaging with me? I can’t imagine how you think this is a winning strategy. Am I supposed to be bowled over by how amazing this potential opportunity might be, change a cardinal rule of our business and through this series of emails think that you’d be a competent manager, effective advocate for your business and a good guy to work with?

The initial email is completely casual, full of mixed cases and grammatical errors. Oh, and totally un-researched. But the second response really takes the cake and what caused me to post this for the world to see. Of course you have one of the biggest deals ever. Clearly this isn’t your first rodeo. Certainly you’re playing in a $20BN market. And without question I’m just one of those cookie cutter VCs. Obviously I should change my attitude.

[BTW, in case you were wondering, I didn’t bother responding]

August 12th, 2010     Categories: Fundraising    
  • http://www.meetingwave.com/p/username JEB

    Agreed. Startups should realize that in the US you currently have a 1 year grace period for filing a patent application after such a disclosure. They can pitch, pitch, pitch, so long as they file the US app within a year. Likely destroys any foreign IP rights, but foreign filing gets pretty expensive so not likely a concern.

    Not only are VC reluctant to sign NDAs, but so are many big companies since the risks of getting tangled up with "you stole my idea" not worth it.

    • sethlevine

      For me it's not about the patent issue. You're right that entrepreneurs have some protection (you don't have to have a patent filed as you point out). Its more about the substance of engaging with someone over email (VC, customer, friend, etc). Every once in a while an entrepreneur responds to my "we can't sign NDAs" email with a note saying that they're not comfortable talking. That's totally fine with me (and completely their call). It's the total lack of courtesy that got me here!

  • An entrepreneur

    As a lifelong entrepreneur, I'm embarrassed by this entrepreneur's behavior and I'd like to apologize on his/her behalf.

    Wow. Just wow.

    If it's not your first rodeo, then you probably already have some semblance of a team. The fact that you're asking a VC that you don't know well enough (since you're asking for an NDA) for help putting together a team means it's definitely your first rodeo.

    And any entrepreneur whose been through the trenches knows that patent filings are not going to save your ass, NDA or not. Patents take years to be granted, if ever. By the time a patent is granted, you better have already carved out a nice business for yourself, or else all you're going to be is a patent troll.

    Get a life.

    • http://www.meetingwave.com/p/username JEB

      Agreed, but the US PTO is trying to speed things up so patents get granted faster (namely, allowing some to receive priority over others and other tricks). They were supposed to get pendency down to 3 years but haven't yet.

      My situation is a little different. I filed my application in early 2000, but didn't start my startup until years later (after someone said "you should build it"). Now have 3 patents based on the 2000 filing and improvement applications. Offering the first batch with a grant back.

    • sethlevine

      thanks. wow was exactly my response (which is why i put it up!).

  • http://www.givingsports.com John

    Thanks for the great laugh. What were they thinking?

    Of course you couldn't respond. You were too busy blogging about it.

    • sethlevine

      Clearly if I hear back from him I'll just send him to this post!

  • Gabriel

    Seth I think that someone is pulling your leg with those emails…………..they are completely nonsense….

    • sethlevine

      I wish! I'm pretty sure they're real (I did Google the entrepreneur after the 2nd note – he is working on a couple of businesses right now).

  • http://donaldryan.net DonRyan

    Ah, a new technique- shaming one into investing. As Dr. Phil would say, "how's that workin' out for you". Ugh.

  • blakemodersitzki

    Seth, great post. I'm still laughing. I've had similar experiences with people wanting to pitch our firm.

  • http://www.zillow.com Spencer Rascoff

    Wow. What a nimwit.

  • Jud Valeski

    I'd like your help but… lemme be rude to you first. cute.

  • Calvin

    My first thought is how nice and respectful you were even with the first email. It would take about two seconds of web searching to find out that no VCs sign NDAs.

    It's great to see evidence of a VC giving a clear first timer, throwing an email over the transom a chance to pitch anyways.

    • sethlevine

      Thanks Calvin. That’s part of what irks me. I try hard to be accessible and (generally) a nice guy. I could have easily blown him off or sent something back saying “do a bit of research!”. As Greg said in another comment, this entrepreneur violated rule #0: don’t be a douchebag!

  • http://gregcohn.com/blog Greg Cohn

    Rule #0: Don't be a douchebag.

    • sethlevine

      well put greg!

  • Dan

    Has anyone considered that the guy's emails may have been a level?

    • sethlevine

      do you mean a way to gauge how i’d react to his being a jerk?

  • PhilSugar

    That is so funny…..I agree with Seth I think its true.

    I've had several people try to come pitch me to buy something and I'm an entrepreneur…….."can I get five minutes of your time???? Please??"

    First thing they do is pull out an NDA. I tell them sorry. They seem heartbroken and offended I won't even look at it. "Can you at least look at it??" Nope.

    • sethlevine

      pulling out nda’s in these situations are just knee-jerk reactions. it’s generally unnecessary (especially for a first meeting). and, of course, somewhat annoying if done in the wrong way!

  • http://www.launchfn.com Karen Rands

    Love it…. I'm so amazed when I also get these kind of bullish (and poorly written) emails. I manage an angel investor group and always getting sending cryptic emails. I usually take the approach on NDAs, in part because I don't have as much to lose as a VC in a naturally litigious society: Sure I'll sign your NDA and I'll tell you why…. "You should have a clause that makes it confidential if it is unique, not something already known or something that can be garnered from general knowledge of the marketplace. I see so many deals, there is rarely a business model that is unique or I haven't seen some portion or spin on the solution, and if the concern is over the technology, it should be patentable. If you are using "trade secret" as your protection, then you shouldn't be disclosing it anyway. And, although I am not an investor, you should know that rarely does an investor sign an NDA before they get into the due diligence process, so if you don't have documents you can provide that require a formal NDA to be signed, rather than just a confidential labeling, you need to create them because you will never get past the front door. — Still need me to sign the NDA?"

  • sethlevine

    that’s a good comeback karen. i’ll definitely keep it in mind!