Founders Expose VC Nightmares, Targeting Specific Firms

Obtaining funding from venture capitalists is a pivotal step for tech entrepreneurs. This journey often opens the door to the infamous VC pitching horror stories. A vibrant discussion unfolded on X this week, brimming with a blend of funny and frustrating anecdotes. We combed through the dialogue to present you with the most enthralling tales.

Greg Isenberg, a podcaster, newsletter writer, and founder of Late Checkout Studio—a holding company recognized for ventures like one acquired by WeWork—kicked off this conversation by sharing a story about a VC dozing off during a pitch. With a substantial following on X, his post garnered significant attention.

“I was pitching in a boardroom at one of the top 3 VC firms for a $15M Series A. There were 12 people in the room. One of the GPs completely fell asleep. Out cold for over 30 minutes. No one said a word. Everyone just carried on,” he recounted on X.

Reports of VCs dozing off during presentations quickly became the predominant horror story. Not just casual nodding off, but full-on slumber.

Zynga’s Mark Pincus shared a similar experience. “I looked at my friend who set up the meeting and asked if I should continue, and she said yes. It was like ‘Weekend at Bernie’s’ meets Silicon Valley,” he stated.

Interestingly, dozing off didn’t stop some VCs from making investments. Numerous founders revealed they received term sheets from partners who had snoozed through their presentations.

“I once pitched a partnership in 2015 for our Series A where one partner (a well-known Midas lister) dozed off & another could not stop frowning. I got a call two hours after IC saying they were sending a term sheet,” shared Liz Wessel. Wessel, co-founder of HR startup WayUp and now a partner at First Round Capital, noted that her team declined the offer—much to the VC’s astonishment.

With an abundance of stories about VCs catching Z’s, former a16z partner Arianna Simpson quipped, “Are VCs okay?? Narcolepsy seems to be widespread.”

Numerous anecdotes also emerged about VCs signing term sheets only to backtrack last minute or ghost founders by failing to transfer funds. Even more frustrating? Some of these VCs continued to treat the founders as if they were still part of their portfolio, requesting updates or even seeking a share of post-acquisition profits. One founder noted that a VC even wanted a portion of the proceeds after an acquisition.

Travis Kalanick, co-founder of Uber known for his persistence, shared a story about catching a VC trying to sneak out of a meeting. Kalanick followed him to his car and pitched from the passenger seat.

Not all experiences were negative. Some founders reported nothing but positive interactions with VCs and shared sincere stories about specific investors. Yes, many VCs work hard, genuinely strive to assist, and resist napping during meetings. However, such unfortunate incidents are so common that Pincus exclaimed, “I f*cking love this moment, when founders no longer fear calling out VCs for silly behavior.”

The most stunning stories

Among the most notable stories was one from Cloudflare founder Matthew Prince. “A Sequoia partner declined to invest in Cloudflare because he didn’t think a woman could lead a security infrastructure company,” shared Prince. The woman in question is Cloudflare’s co-founder and COO, Michelle Zatlyn. Considering that Cloudflare is now valued at $87 billion, with an anticipated annual revenue of $2.8 billion by 2026, this judgment has not aged well.

Sequoia partner Shaun Maguire, who is no stranger to controversy, responded that he has always respected Zatlyn and urged Prince to reveal the partner’s name. Prince cleverly demurred, saying, “Maybe one day over drinks. But I bet you already have a good idea.”

But that’s not all; Prince had more to add!

He recounted an encounter with prominent investor Vinod Khosla, who allegedly offered to invest and then suggested that the founder “fire” his co-founders and take their stock. “The charitable interpretation was that it was a test of my character. However, I was so offended that we never spoke again. I literally blocked his number.”

Prince was quick to acknowledge that Khosla is “extremely smart/clever. He has been an incredible investor—his track record is indisputable. Just not the personality I’d choose to work with.”

It’s important to recognize that memories can differ, and we cannot ascertain the exact details of Khosla’s remarks. Still, many were taken aback by such openness regarding one of the Valley’s most successful and influential VCs. Many viewed Prince’s candidness as indicative of having “FU” money—as he is now a billionaire.

Not every story cast VCs in a negative light. Prince believed he had set up a straightforward meet-and-greet on a Monday with Marc Andreessen, co-founder of venture firm a16z. Instead, Andreessen arrived with his entire investment team, eager to be impressed. Unfortunately, an unprepared Prince did not make a positive impression. “I framed the rejection letter they sent,” he remarked about the outcome. Others recounted similar experiences with Andreessen and his firm.

Perhaps the highlight of humor came from Julie Fredrickson, a founder-turned-investor, who got a call from a VC associate before arriving at a firm’s office—warning her about a rock formation outside the window that, unbeknownst to the investors inside, resembled male genitalia. “The firm will forever in my mind be Dickrock Ventures,” she noted.

While Valley VCs were the focus of many anecdotes, founders also shared experiences involving international VCs. Some VCs even recounted their own experiences pitching to limited partner investors.

The threads are not only entertaining but also enlightening: they unveil the opaque fundraising process, the authentic power dynamics, and the commonplace experiences founders typically whisper about privately but rarely discuss openly.

Isenberg perhaps encapsulated the lesson behind these stories best: “If you’re raising right now, just know: every founder has a story like this. The process is odd. The power dynamics are peculiar,” he wrote.

A secondary lesson might be: if Andreessen agrees to meet with you, he is serious about business.