Is your deal moving forward?

1. How quickly does the VC respond to your calls or e-mails? This is more of a disqualifying question than a qualifying one. If a VC consistently takes more than one week to respond to your e-mails or calls in a normal work week, I’d say it’s pretty safe to disqualify their interest in 98 percent of cases. If they’re responding consistently to you with positive sentiments in less than 24 hours, I’d consider that a positive sign. Everything in between is a gray zone, but the more responsive the better.

2. Who is investing the time and resources in [due] diligence - you, the VC, or both? For a productive process, it should be both. If the nature of the diligence process is the VC asks you for information, you scramble to pull it together, and that’s it - it’s not necessarily a buying signal. You want to see an investment of time and energy from a team of folks at the VC firm, including a partner. Such an investment could include onsite visits (especially if air travel is required), spending money on diligence (e.g. legal, technical, financial, etc.), clear commitment of time on diligence calls, or a partnership presentation (that is an investment of other people’s time).

3. Is the VC making progress “reportable’’ to a partnership every week? Most VC firms manage a deal pipeline the same way any company might manage a sales pipeline. When an investment opportunity progresses to a stage of real interest and opportunity, they raise it to a level internally, which presumes some level of weekly reporting to the team.

4. At the end of the day, do you feel like you’re chasing the VC or is the VC chasing you? Any VC worth his/her salt knows how to go 110 percent after a company they want to invest in. We all know we need to be aggressive in a competitive environment to win the best opportunities.
larrycheng.com

Corporate sociology. “After two years at a big company,’’ Hewlett-Packard executive Antonio Rodriguez blogged recently, “I think I’ve come to understand the way in which people work here.’’ Rodriguez, who arrived at HP after selling his start-up to the company, says his “20-20-60 rule’’ outlines the mix of high achievers, laggards, and muddlers in the middle at any large organization.

Twenty percent of the people in a big company are operating above their skill/will level. These are the folks who make up the “Peter Principle’’ bucket - promoted beyond their abilities. They are also the folks who are living true to the famous jazz edict: Always be the worst guy in the ensemble. God love them for taking that risk - and that is despite how miserable they may make the rest of us.

Twenty percent of the folks are the real “A’’ players. When you read about Microsoft stealing [an employee] away from Google or Amazon, these are the folks they are talking about. They have the skills to get things done, the passion, and perhaps most importantly, the patience required to make elephants dance (big companies get stuff done). Every time I meet one of these gems, I walk away believing a little more in the human condition.

The other 60 percent of folks are what most people mean when they talk about the “fat’’ in corporate America. They’re generally only good at producing and consuming meetings and at looking good in front of their bosses. They don’t take risks, but not because they are too limited (these are not Peter Principle folks), but because they are optimizing for a different outcome: their own career advancement. Knowing that most products and services fail, these folks prefer to be “in’’ with some senior exec who will always take care of them. And when the [stuff] hits the fan they’ve got their story down pat as to why everything that was outside of their purview was what “went wrong.’’
theonda.org

Have you seen an interesting item on a local business blog lately? E-mail kirsner@pobox.com.