Jeff Bussgang has a nicely done post on how entrepreneurs and VCs view time differently. The former see it as their enemy, and the latter are almost always happy to wait and get more information before making an investment:
And so there’s the conundrum: what’s an entrepreneur to do in the context of a fundraising process when time is their enemy, but the VC’s friend? One piece of advice is to simply recognize this difference in this attitude towards time and try not to fight against it. One wizened general partner at a top firm once remarked to me about a particular deal: “They told me I had to make a decision in the next few days, so I told them I’d save them a few days and simply pass. It’s VC 101 – anytime an entrepreneur puts a gun to my head, I pass. There’s always another deal.”
Good point. And it puts the lie to people who think they can create urgency in the venture investing process by somehow lighting a fire under a VC. Maybe, but more likely is that you convince the venture investors that there’s something screwy with your firm and they’d be better off passing and waiting for the next deal where there wasn’t so much urgency to make an “early” decision.
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Further relevant reading on this point can be found at:
http://www.venturemomentum.com/ezine/feb2005issue.htm#hdr3