Liz Wessel Shares Awkward Experience from 2015 VC Roadshow
Liz Wessel encountered a well-known Midas List investor falling asleep during her 2015 Series A fundraising roadshow, while another investor continuously frowned.
Despite the poor performance, she received a term sheet from the investor 2 hours after the roadshow.
When the startup team ultimately declined, the investors expressed shock.
Source: Public Information
ABAB AI Insight
Liz Wessel, as an early-stage entrepreneur, has shared her fundraising experiences multiple times in public, having founded Werk and gone through several rounds of financing. This recollection continues her long-standing observation of the opacity and emotionality in VC decision-making.
In the capital landscape, VCs in 2015 rapidly issued term sheets in high-growth sectors to capture deal share, prioritizing hot projects even with insufficient due diligence, driven by FOMO, leading to a surge of funds into consumer internet and SaaS fields, while entrepreneurs achieved better terms through multiple comparisons.
Similar to the frenzied bidding by VCs during Uber and Airbnb's funding periods from 2014-2016, the VC industry was transitioning from "chasing projects without looking at details" to a more professional due diligence and data-driven decision-making phase, with the market entering a rational period post-2015.
Essentially, this reflects capital concentration: early-stage VCs made emotional quick decisions to concentrate quality project resources, driven by the interplay of scarce quality deals and abundant LP funds, resulting in a disconnect between term sheet issuance and actual investment willingness, giving entrepreneurs more negotiation leverage.
ABAB News · Cognitive Law
The colder the surface, the more desperate the funds often are.
When investment decisions are made quickly, emotions dominate over data.
When VCs are more eager to chase projects than entrepreneurs are to chase money, the balance of power has already shifted.