Startup Experts Share Their Investor Horror Stories

One founder describes waiting an hour at a London fund, then meeting a partner who ate with his hands, picked at his feet, and smoked in the office. The partner put out his cigarette in his lunch and poured coffee over it. The founder says the experience reflected status games that can distract from a startup’s actual merits.

A Justin.tv founder recalls a famous VC spending the start of a pitch asking co-founder Justin about Chinese phrases. The founder took the digression as a sign that the investor might not use their time well. YC advises founders to treat a fundraising meeting as a two-way evaluation: strong investors respect time, answer questions, decide quickly, and leave founders room to run the company.

Brad Flora says Perfect Audience had reached about $150,000 in monthly sales but held only $200,000 in the bank. He sent investors a vague “Cash Crunch” email, then flew from San Francisco to Chicago expecting funding; only associates attended, and he had no prepared pitch. He advises founders to get perspective from others and explain how a funding request fits the company’s broader strategy.

A Posterous founder says a Series A meeting with Ben Horowitz ended when the co-founders answered that they were both CEO. They had not researched Horowitz’s strong preference for a single CEO. Other founders describe intrusive personal questions and distracting investor tests, while the YC advice is to research investors, keep meetings professional, and avoid treating investor reactions as a measure of a startup’s worth.

The speakers caution against using investor enthusiasm as a scorecard or changing a product into a “Frankenstein idea” to satisfy pitch feedback. They suggest adapting how a startup is presented while keeping its strategy anchored in solving a real problem. Fundraising is a means to build the company, and founders should spend as little time on it as they can.