This content was created by Tim Draper. This content was uploaded by Tim Draper. This is a YouTube video titled "What Investors say vs what they mean | Andy Tang" (posted 2017-11-26). The excerpt is an interactive classroom/talk led by Andy Tang with multiple students (named participants include Praneet and several unlabeled speakers) where they play a game interpreting common investor responses. The discussion covers venture-capital topics such as signals of interest vs. rejection, syndication, due diligence, timing (too early), and what investors may mean by phrases like "we'd like to stay in touch" or "talk to my partners."
Chapters
Okay, let's finish the talk with a game, okay? So what investors say versus what they likely mean, okay? So this is part of the class participation, you have to tell me what you think, okay? What does this mean? If you have not heard this before, you will hear this. Somebody read this for me.
We like you and would like to stay in touch.
We like you and we'd like to stay in touch. Who wants to take a crack? What's your name?
Praneet.
Praneet? Yeah.
So what they mean is like we like you as the founding partner and we want to stay in touch only when you meet certain milestones or when you have some certain plans to share, but not on some regular basis like hi, I'm doing— how are you?
That is for sure. They definitely don't want to meet you on a regular basis for no reason. Good answer. Yeah, what do you have?
We actually don't like you, but we don't want to lose possibility if you will actually success.
Now that's a very realistic, slightly cynical view that we don't like you, all right? The truth is somewhere in the middle. Okay, I'll share with you what my thoughts, okay? Something is missing, okay? Something is missing. And if you sort of take the— my interpretation of looking for 2 things, the team and the market, right? Some people, some investors, so I'm just one guy, right? Some people may want team and business model or team and gross margin, whatever it is, something is missing, okay? In my mind, in my sort of world, The idea is missing, right? But if I take it at face value, right, this is not a bad outcome because if I don't like someone, I would just thank them and have them move on because I'm too busy. If I say I like you and want to stay in touch, then I'm interested in the person. This person may do something else, right? Is there a little bit of fear In that, that you talked about, the slightly cynical view that I might miss out on an opportunity, for sure, that is baked in in the mentality of the business, right? I like you and my fear is if you do something big, I don't want to miss out, right? So there's that, right? So there's a non-cynical and positive way of looking at this, right? Does that make sense?
Mm-hmm.
So look at the next one. A bit too early for us, but we can introduce you to our partners. Who wants to take a crack at this? Let's try somebody different. Anyone? All right, no taker? Praneet? Okay.
So what they're looking for is like they're not sure whether how investable it is, so they're looking for if other investors could invest so they could participate in later rounds.
Okay. Anyone else? What's your name?
Kadlet.
Kadlet, okay.
Maybe they want to actually check if the idea seems feasible or good with someone else and like evaluate better.
Yep.
Yeah, they want the partners to do the due diligence so they can just join in later.
So yeah, go ahead.
Or maybe it's really the wrong size of the company, if they're more like investing in bigger or further along.
This is probably like 90% of— yeah, go ahead.
That means that maybe they want to share the risk between others, so they maybe invest in some part.
Yeah, they may want to syndicate. So these are all right. So this— so that was a good outcome, right? A, people are busy and B, you never want to bother your friends if it's something crappy, right? So you know it's not crappy, so that's a good outcome, right? Between investors we also collaborate, right? Like you said, we share risk by syndicating. We also share work by having our partners do some diligence. Oftentimes it's a sector that, say, I don't understand, someone else may know better, like biotech, I typically farm that out because I don't know the space. Or this could be too early for me and I'll send it to one of our upstream partners, they could invest and then they could Then send it to me when it's a little bit more mature, right? So all of those, but generally this is, if you hear this, it's a good response. 'Cause they could easily just say go away or just say nothing, right? How about this? Talk to my partners.
I guess like I was not here, I was in a meeting, I understand what you were talking about. So it's maybe like they want to let us— give us more time to evaluate it.
More time to vet it?
Sorry?
Can you repeat?
Yeah, so maybe they are on this point that give us more time to evaluate it, or maybe they would like to show our idea to— More in their network and to see whether it's going to work or not. And then they see the potential somehow and they need time to think over it.
Okay, so they want some time, buy some time.
This is just an excuse for the investor to reject your plan today.
Okay, so rejection. How about you? Rejection?
Possibly not come back.
Okay.
I don't know if you are able to do that, so I would talk to a specialist.
Talk to a specialist? Someone raised their hand here.
Oh, I was also going to say it's a rejection.
Rejection?
There's actually a movie where they say— Huh?
There's actually a movie—
Oh, is that right?
Where they say like this is the sentence of rejection.
So it's a pretty cynical crowd here. So that's definitely one way to look at it.
