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Should VCs Start Crowdshaming Sh-tty Startups?

 

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Like most VCs, I get carpet bombed with pitches almost non-stop. They can range from the benign and harmless pitches all the way to the ones that were clearly written by someone who had just discovered bath salts. Most pitches are just plain awful and seeing them infest my inbox has brought me to the breaking point.

It got me thinking about ways I could combat the problem: I could delist my email address? No, that would mess up my deal flow by making me less accessible.

I could write a detailed guideline of what I look for in a startup? Already tried that and apparently everyone doesn’t know how to read.

I could hire an analyst but I would be condemning that poor sap to a life of depressing pitches which could then lead to suicide.

But out of the blue I remembered watching a new show called Salem and in the very first scene, the village fornicator was being pilloried and brutally branded. This got me thinking: what if we could do something similar to bad startups?

Public humiliations have been around for centuries now. In pre World War Japan, adulterers were laid bare and publicly exposed. Dunce caps were placed on the heads of unruly school children. And if you really wanted to get medieval? “A butcher selling bad meat would have to suffer the offending piece of meat being tied under his nose whilst tied up in the town square for public ridicule.”

But nowadays we have something called “human rights” which prevents us from using such barbaric forms of punishment so that’s one less way of stopping bad startups from pitching us.

But what if we did something similar instead? What if we could crowdshame bad startups the same way a judge shamed this bad driver?

If you think about it, crowdshaming bad startups makes perfect sense: there are dozens of online forums filled with investors who disparage bad stocks all the time. Jim Cramer even goes as far as smashing things to get his point across.

Hell, even startup entrepreneurs have a website they can use to bad mouth venture capitalists.

Why doesn’t the industry have its own online forum where we can pillory and flog the bad startups who pitch us? Why don’t we mention them in our blogs or our tweets? Why don’t we have a blacklist that’s available for all to see?

Here’s an idea: every VC firm should have a disclaimer on their “send your pitch” page which saids this:

“Follow our guidelines and don’t send us bat shit crazy pitches or else we will publicly shame you on our blog and Twitter.”

However, crowdshaming bad startups could result in some very different outcomes:

1. Startup founders will think twice about pitching you and soon bad startups will be weeded out of existence (hallelujah!)

2. How objective can we be? For all we know, the startup we shamed could actually be great and we would have sullied the founders reputation and prevented them from getting funding.

But then again, truly great startups always seem to find investors do they not?

3. Another issue is deal flow – if entrepreneurs are scared of potentially being outed and publicly shamed, could that stop a great entrepreneur from hitting that send button?

Perhaps, but if an entrepreneur is afraid of sending you their pitch, what does that say about their character and the strength of their ideas? Are you afraid because deep down inside you know your startup is actually bad?

Whether crowdshaming bad startups will work or not remains to be seen. All I know is, I am mad as hell and I want to do something about it.

Reprinted with permission.

Image Credit: CC by Garrett Coyte

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About the author: Jay Deng

Jay Deng is an angel investor and venture capitalist. He invested in two companies whose exits topped $800 million. He is also the CEO and founder of Diva For Less.

  • David Goldberg

    Fellow VC here, and I think you bring up some great points. I thought about starting a blog which detailed every pitch I heard, the good and the bad, along with my thought process. While a small few may be afraid to pitch, I think many seek to get judged. Will be educational for the entrepreneur, as well as all readers. But to me the bigger point here is, while i don’t know if public shaming is necessary, more bluntness and brutal honestly is needed. Many of our peers are afraid to outright say ‘no’, so the entrepreneur with the terrible pitch feels emboldened to pitch 20 others.

    • http://www.alleywatch.com/ AlleyWatch

      David – AlleyWatch would be a good venue for you to publish your thoughts. Let us know if you’d like to run a column.

      • David Goldberg

        Intriguing. Just this topic, or any? Single, or ongoing? Can you send info to dgoldberg@corigin.com

  • naildriver5

    Whoa ! get a grip. One man’s trash is another’s treasure. I When we get a deal that looks bad, we just say no and move on. Takes some time to analyze – 15 seconds to 15 minutes. My staff gets paid to do this, it is part of their job.

    Irrespective of the fairness to our stockholders, There is something unseemly about publically bad mouthing some one because you don’t like their submissions. While it hurts them, it also hurts those they represent.

    If you really need to send a message. Start a preferred entrepreneurs club and only admit those you like. Advertise the preferred members to others if you like. Better for you and better for the industry as a whole.

  • Kingmaker Games

    I don’t know what kind of crazy ideas the VCs are getting pitched, but I can imagine. As an entrepreneur it would be much more valuable to know what I did wrong. It would take the same amount of time to educate a person as it would to reticule them. In my opinion the internet already has enough vitriol without adding to it.

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