Read 'Em and Reap: Decoding the VC Poker Face

There are a lot of different words that can be used to describe the venture capital community and its relationship with entrepreneurs. Many of them, however, cannot be printed. For example, I once heard a VC say to an entrepreneur: “It would be easier to build a nuclear reactor at [UC] Berkeley than to execute on this idea.” And I once heard an entrepreneur say of a VC: “If I ever see that guy in a parking lot, I will speed up to hit him.” You get the idea.

The Sand Hill Road crowd does have a reputation. In an unscientific opinion poll, the collective sentiment was probably best described by a friend of mine this way: “Let’s just say you probably don’t want to grab a beer with a venture guy, or want your sister to marry one.” Yikes, I am a VC. No one wants to have a beer with me? Where did this rap come from? I think it all starts with the clumsy poker that gets played out in pitch meetings.

FoundRead LogoVCs are trying to get big returns for their limited partners. That’s all. If they can save the world or cure cancer in the process, even better — but that’s not their goal. Entrepreneurs, on the other hand, are trying to convert their dreams into reality. We all have deeply “vested interests” and all these intents converge in the pitch meeting, where everyone shows their proverbial “poker face.” (According to Joe Navarro, a former FBI counterintelligence agent and author who specializes in decoding nonverbal communication, “double-thumbs” is the “tell” for a player happy with the cards he’s seeing.)

Pitch meetings go something like this: Entrepreneurs bound into a conference room, show their PowerPoint deck, bear their souls, ask for a few million dollars and leave, not quite knowing where they really stand. And so they wait. And wait. And wait. Some receive the big checks to get their company off the ground, but more often than not, they wait only to be rejected. Worse, they never hear anything at all. Big checks are rare, so this scene of deafening silence is played out a hundred times a day in the venture world.

But from what I’ve observed on my end of the table, VCs can respond to a pitch in one of three ways — each of which is fraught with peril:

  • Enthusiasm: If the VC is excited about the idea and the prospects for the company, the entrepreneur believes the money is sure to come. If the company is funded, hallelujah, but if the money doesn’t come, the entrepreneur feels betrayed and led on — pins in the proverbial VC voodoo doll.
  • Criticism: When a VC tries to make recommendations or give feedback, it can be like telling the entrepreneur the baby is ugly. Often there is a sense that the VC, who probably doesn’t know much about this business, just criticized the best idea since alligator clips.
  • Stoicism: If the VC doesn’t say much or react at all, the assumption is that the VC didn’t pay attention and doesn’t care., prompting the entrepreneur to think, “What a waste of time, money and stress.”

It’s a quandary that every VC has to deal with. Other than handing over a term sheet straight away, any response risks damaging the VC-entrepreneur relationship. Can you blame us for sitting still and saying little?

Even Warren Buffett once famously said: “When the phone don’t ring, you’ll know it’s me.” Of course, even if the phone don’t ring right away, it doesn’t mean we’re going to say no. But saying as little as possible is still the most efficient, and benign, option we have —which is why it’s the response most entrepreneurs get, most often.

So, in your next pitch meeting, expect the VC poker face. We might appear indifferent, or stoic, but don’t read too much into our immediate reactions. (Except maybe those double thumbs.) Like the old saying goes, “Patience is a virtue.” And champagne gets better with time. Meanwhile, I will be careful in parking lots.

Richard Moran is a partner at the VC firm Venrock in Menlo Park, a former Accenture consultant, and the author of

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