Earlier today, I tweeted: “Idea: An unfinishing school for incubator & accelerator graduates to unlearn the fundraising tactics they’ve been exposed to.” People actually liked the idea and said people would show up to such an event, but there’s no way I’m organizing that, so instead, I’ll write this post as a preamble to the unlearning constitution, tailored to those who are in *any* incubator or accelerator that ends in a demo day – and to be clear that I’m not talking about any specific place, but rather the culture and environment that I’ve seen fostered as it pertains to fundraising. I know people will immediately assume YC and 500, but I’m talking about every single one I’ve seen. I’m not a Demo Day person, but I’ve observed some things that I believe are picked up or gleaned while participants are in these environments, and I’ve found many of them to be counterproductive for the founder, hence my motivation to write this post to offer another outside, unbiased perspective, as I’d like to see everyone succeed:

  1. Unlearning #1: That Demo Days are for *you*. Investors often show up at Demo Days primarily to meet other investors and compare notes. While many investors know each other and are friends, they often don’t meet (unless close friends) explicitly but love to bump into one another. All the better while at a Demo Day. The very top investment firms don’t really get amped up about this, they often track and monitor people and companies for months, maybe even a year.
  2. Unlearning #2: That you can smear an investor’s reputation if you don’t like your interaction. Aggressively sharing background information investors across batches. It does help to reference check, but if you dig hard enough, you’ll find negative feedback on everyone. That may be because most investors are set up to say “no.” Furthermore, sometimes a “no” paired with a fair critique in a pitch can be internalized by a founder as negative and then sent back into the grapevine.
  3. Unlearning #3: That handshakes set the parameters for business. Explicitly asking for a handshake agreement can turn off investors. I understand why these things are important, but they don’t work in real business, with partners, or in other situations. Furthermore, what if that turns off working with an investor who the founder really wants?
  4. Unlearning #4: That an incubator or accelerator should protect your interests. An incubator or accelerator cannot nor should not protect you from the invisible hand of the market. A big part of learning the ropes in business is to identify those who you can work with and those with whom you cannot. You will meet people with less than stellar motivations. Investors may try to take advantage, but so may a future employee, or a potential partner, or even a potential acquirer.
  5. Unlearning #5: That participation will greatly increases your chances of receiving funding. Expect even engaged investors to say “no.” Some investors only say “yes” twice a year. Yet, I recall one meeting where a soon-to-be incubator graduate took my very fair and sober market-criticism as an attack on their methodology. Not only wasn’t I going to recommend an investment, but now I was turned off from helping this person. Even when someone says “no,” there are many folks who will still help, offer feedback, make intros.
  6. Unlearning #6: That fundraising tactics matter as much as product innovation and literacy. Don’t spend energy trying to game fundraising; instead, try to game the product feedback loop. Investors are often looking for unique products (or people who can build them), not market sizes, and so on. If you can find a way to put something in the hands and heads of an investor and ask for honest product feedback, I would guarantee the first conversations will go better and investment may not be far behind. The best investors want to get into a product-sparring match and find founders who are excited about that exchange.
  7. Unlearning #7: That platforms can be gamed. Don’t game AngelList, use it to your advantage. AngelList is just going to be more and more powerful, and you don’t need all the weight of a medium or big fund to start. Yes, you want to work with specific people and I would too, but there’s nothing wrong with crowdsourcing your early round and going back to the most important thing — building your product and your user/customer-base.
  8. Unlearning #8: That investors are lemmings. Investors may exhibit herd-like behavior, but that’s just what you see online. Many investors are actually like writers — they don’t want to be pitched (especially at a Demo Day), but would rather seek out things they like and go hunt them down. There’s a thrill in the chase, but you can’t manufacture the specific tastes of their appetite.
  9. Unlearning #9: That all demos should look the same. Most of the ones I see or hear about sound like TED Talks. Think of something different on stage, explain who you are, do something that will stand out and capture the essence of you and your product. Privately, investors roll their eyes when they see ginned up numbers and charts without realistic metrics and proper boundaries.
  10. Unlearning #10: That it’s “us” against “them.” Do not blindly buy into the “founder is great, fuck the VC” mantra without gaining some experience about it. These types of messages are red meat. There’s no doubt investor behavior can improve. But, these types of messages are designed to gain mindshare in your head, and while they can be fun and sometimes directionally correct, they fail to compensate for a deeper reality, which is that while the VC industry is battered and may be going through several big market corrections, the asset class will never go away, the good VCs will be in business for a long time and think about migrations and the exodus each bubble bring, and among the younger/smaller investors, some of them will go to the bigger funds or start their own. Life is long, and even just recently, I’ve seen evidence of these near-sighted tactics rear its head in some interesting ways. It is all a balance — some investors behave badly, and so do some founders. People are different. Accept that fact, and move on in this world accordingly. Good luck!