An Entrepreneur in the Partner Meeting #3

August 11, 2015
Foundation Capital

During my time at Foundation Capital as an Entrepreneur in Residence, I will be writing about every partner meeting I attend. You can find my first post here and my second post here. Every week, I will provide a takeaway for entrepreneurs. This is the third part in the series, and I will be taking a break this coming week to focus on the launch of my new endeavor.

Week 3 Takeaway: At later stages, be careful about “throwing around” numbers.

If you are a later stage company (B or farther), your numbers will come under an intense amount of scrutiny. I experienced this firsthand when we raised our Series B at Scripted, but it’s interesting to see this from the VC perspective and watch how an experienced partnership talks about issues related to numbers.

During this week’s meeting, partners discussed some later stage potential deals and asked a number of questions about the credibility of the forecast and the go-to-market numbers.. The way a partnership decides if numbers are credible is by including multiple partners in the process over the course of many meetings. For later stage deals, you are clearly going to have to pass through more gates to get a check.

When you get to the second or third meeting with members of a partnership, keep in mind that they are going to confirm your numbers with each other to ensure that you are being consistent with what you present.

But partners don’t just scrutinize your numbers to validate your forecasts. Partnerships will use meetings where numbers are discussed as opportunities to corroborate their own assumptions about a market or a specific company. They are effectively verifying whether work they did in a specific market (growth forecasts, etc.) is consistent with what you, as a founder, believe to be true. Partnerships really respect CEOs they can learn from.

The major takeaway here for entrepreneurs is not to simply throw around numbers. When you get to later stages, KNOW your numbers, stay consistent with your numbers, and don’t utilize numbers just for the sake of seeming smart. You will look impressive, credible, and buttoned down if you stay true to your story. You will look more impressive if you help the partnership learn in the process.