How to Build Trust with Venture Firms

An article we liked from Thought Leader Mert Hilmi Iseri of MATH Venture Partners:

Good, Bad, and The Ugly: How to build trust with venture firms during fundraising

My hand hovered on my cell phone.

I nervously pulled up my address book to make a very scary phone call.

My palms were sweating with anxiety.

We had simultaneously received the term sheet we have been fighting for many months at SwipeSense for our Series A (an $8M raise!), and received a cancellation notice from our largest hospital customer within a 24 hour period.

I didn’t know what to do. Make the call to our investor and let him know that our sales numbers going in the model were off and risk the investment. Don’t make the call and have a VERY awkward first board meeting afterwards. The choice was simple. The call was hard.

I nervously dialed his number and broke the news. How it happened. What we are doing about it. It was direct and embarrassing. I ended with a very simple message. “If this news changes your view on the viability of this investment, we understand and will respect your decision to not invest in this round, no questions asked.”

His answer shocked me. “Mert - we are investing in YOU and your team as a founder, customers will come and go. It’s how you deal with them that is what we are buying into. We’re in.” I’ll never forget that answer. Over the years, we had our ups and downs, but we always valued our ability to be...