Indicating social proof in the VC fundraising process

28 June 2011 | 3 Comments

Bryce from OATV’s post a while back stirred up some debate over Angel List .  It was an important post in my opinion, but one line really stuck out to me.

Given that most companies seeking funding at this stage have little to no revenue, low user numbers and light usage data AngelList puts a tremendous amount of weight on something they call “social proof”.

While not many entrepreneurs have employed social proof in the process with such directness (at least at later stages of fundraising), I have noticed an interesting tactic that some entrepreneurs have employed when raising money.  I have no way of knowing if it’s intentional or not but it has happened with such frequency that I am led to believe it’s sometimes deliberate.

OMG... I hope you didn't see that.

I call it the “accidental VC slip” method. It goes something like this: an entrepreneur is pitching and goes to show a quick demo of the website on their laptop. However, the Google Calendar is in the open tab and very clearly shows the meetings with other top VCs in there. Or, the entrepreneur still had the wi-fi login screen from another firm in the browser. Or, an email from someone named Mike Moritz sits at the top of the Outlook queue.  I have even seen someone drop business cards from several Kleiner Perkins partners on the table, leave them on the table, then notice a few seconds later and quickly scoop them up.

I view this as a clever way to indicate the “social proof” that Angel List relies heavily upon. From the entrepreneurs perspective, it’s not typically urbane to talk about which other firms are involved in the process for a variety of reasons, and this acts as a unique “hack” to drive interest.  In VC, as in the movie industry, “ nobody knows anything ” so any small advantage will help take the process through to an investment.

  • Josh Breinlinger

    Haha, I like the business card trick. u00a0

  • Kyle

    Thanks Josh – ever seen it used before?

  • Matt Hunter

    I’ve heard of companies leaving another firm’s name in the footer deep into the deck as a “mistake”. u00a0