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Paul Singh’s 7 Dirty Secrets of Venture Capital

paul singh dirty secrets

On Tuesday night, Tech Cocktail headed to DC for a Sessions event called Learn How to Get Funded by DC’s Biggest Startup Investors. Among the panelists was Paul Singh, the founder of Disruption Corporation and general partner of the Crystal Tech Fund. He spent the evening giving away some dirty secrets of the industry (or harsh realities, as we like to call them). Here they are:

The public story isn’t the real story

Not all investor-startup meetings were of the serendipitous, “love at first sight” variety that you hear about in press releases. “There’s a public story to every funding and a private one. The public story is that we’ve funded people in the back of taxi cabs after a one-hour ride. The private story is that there were like 7 introductions, we met them for three weeks, and we decided to do the deal,” said Singh. 

Listen to what we do, not what we say

If investors aren’t handing over money, that’s a no. “Another dirty secret: there is the game that people play and the invisible game. Don’t pay attention to what people tell you is happening; pay attention to what’s actually happening. Watch the behaviors. You will never hear an investor say, ‘I think that’s a horrible idea.’ You will never hear an investor say no. Just follow the dollars.”

Associates are a waste of time

“An associate [is] never going to write a check and is basically not worth your time unless you want to practice pitch,” said Singh. “A bigger trend in the industry has been this trend of lots of partners at VC firms. Nine times out of ten, most of them are partners in name only. It’s because smart entrepreneurs started to realize that associates aren’t worth talking to – another dirty secret in the industry.” 

It doesn’t happen in one meeting

“So many people…have this idea that you’ll have one good meeting, money will fall from the sky, and life will be good,” Singh said. Instead, the goal of your first meeting should be to get a second meeting, and the goal of your second meeting should be to get a third. By then, both sides will probably know if they want to work together. 

An idea’s not enough

“Four or five years ago, you probably could have raised on an idea. But the unfortunate reality now is companies are going online everywhere – they’re coming from Africa and India and Kansas and all sorts of places,” said Singh. “The dirty secret is the bar has risen.”

No risk, no reward

“Equity is proportional to the risk you take, not the work you put in,” said Singh, quoting someone else. That’s why VCs look down on founders who have full-time jobs. 

You need to be remarkable

“One of the other ideas of this invisible game is that notability now matters more than credibility. Credibility is just table stakes – you got to have that to just play the game,” said Singh. “Notability – you’ve got to figure out how to make sure you stand out of the noise.” 

Tech Cocktail CEO Frank Gruber is a venture partner with Crystal Tech Fund, COO Jen Consalvo is an investor in Disruption Corporation through the angel group NextGenAngels, and VP of marketing and community development Justin Thorp is an advisor to Disruption Corporation. 

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About the Author

Kira M. Newman is a Tech Cocktail writer interested in entrepreneurship, work-life balance, and positive psychology. Since 2011, she has been traveling around the world interviewing entrepreneurs in Asia, Europe, and North America. Follow her @kiramnewman or contact kira@tech.co.

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