A few years ago there was a popular book that purported to bridge the divide between men and women called “Woman Are from Mars, Men Are from Venus”.  Perhaps you are fortunate enough never to have someone quote you a passage from this book, or give you a copy to encourage your communication skills.  In any event, the book’s central thesis – you have to understand how the other half thinks to truly communicate, seemed apt to me yesterday as I reviewed this post from TechCrunch.

The gist of the story was the passage into death of an unfortunate start up called FilmLoop.  The story itself appears to be a sad one – a start up raises significant venture capital, and is then merged out of existence – apparently squeezing out the founders.  Certainly, there is a cautionary tale there for any entrepreneur who is looking for venture capital. But, to me, the more interesting and instructive thing were the many, many comments following the blog entry.  Hence, the Mars/Venus moment. 

The comments fell into two general camps: entrepreneurs who saw the story as another example of how VCs are evil and a smaller group, mostly of VCs, explaining that the VC at question was really just doing his job.  But, the emotion behind the entrepreneurial comments --- Wow.  The commentators really do get exercised, particularly on the VCs are evil side of things.  As you read the comments you’ll see what I mean.

What might not necessarily be obvious, though, is how many entrepreneurs who approach venture investors for funding really do have the attitudes represented in the FilmLoop blogstream.  I see it all the time, both in the initial meeting and (sadly) sometimes after an investment.  These entrepreneurs go into the process expecting to find evil, and often that’s exactly what they find.  The question is whether they find it because it is there, or because they make it happen. The answer of course is that it depends……

One thing that I do know for sure is that an entrepreneur who tries to have a relationship with the VC that is not based on transparency will fail miserably.  My father used to say “you can’t snow the snowman” (generally after I offered a lame excuse on why I didn’t do my homework), with the point being that he was older and had seen it all before.  Well, make no mistake, an experienced VC has seen a great many things, and worked with a wide range of people.  Rightly, or wrongly, a VC will ferret out the withholding of information or management of facts.  That’s one of the things that makes a good VC – “pattern recognition” – making connections quickly.

Of course, an entrepreneur might say that all the VC is doing is making an uninformed snap judgment……

In the interests of fostering greater communication, let’s spell out some of the truisms that entrepreneurs and VCs often hold of the other:

Entrepreneurs think VCs are evil because:

• They want control.
• They will fire me the first chance they get.
• They provide their investment solely to get a return.
• They don’t take enough time to understand my business.
• They react badly when told bad news.

 VCs find entrepreneurs frustrating because:

• They do not want to share control with the VC.
• They get in the way of the company having the best management, whether or not it is the entrepreneur.
• They are not focused on growing and selling the business as quickly as possible.
• They don’t appreciate how many directions a VC is pulled in.
• They react badly when told bad news.

Clearly I’ve selected a small sample to illustrate the point, but aren’t so many of them mirrors of the same thing?  In other words, do we really have in the interaction between VCs and entrepreneurs a Venus/Mars divide?

As I have mentioned above and in earlier blog entries, an entrepreneur who is looking for venture capital must understand the limitations in the VC’s world, and the limitations on his world view.  He shouldn’t go into the interaction with unreasonable expectations, but he should look for one very important thing: acknowledgment.  Acknowledgment from the VC that the entrepreneur has prejudices and concerns that will shape how he works with the VC and how he “hears” what the VC says.  In turn the savvy entrepreneur must give the VC transparency and trust, otherwise the interaction between the entrepreneur and VC is doomed to fail.

This is not to suggest that there are not people involved in this dance who are truly “evil”.  Like anything else there are bad apples – people who in this context look to game the other.  But, in my experience in the industry that is the exception, not the rule.  More often, people do not take the time to communicate clearly, and allow their unspoken prejudices to govern their reactions.   My best advice is to look for a business partner that acknowledges and appreciates your prejudices and acts to counteract them.  In other words, don’t skate around the issues that separate entrepreneurs and investors, but instead hit them head on.  Not only will you be more likely to find a better initial fit, you will also be more likely to have a successful partnership over the longer term.