5 Red Flags That Make VCs Walk Away

An article we liked from Thought Leader Chris Neumann:

I Have Questions…

Here are 5 red flags that leave most VCs scratching their heads after reading your deck:

1. Multiple Incubators / Accelerators

Let me get this straight: you did Rocket Founders? And then Instant Incubator? And Super Startups? And Awesome Accelerator after that…?

For a significant percentage of VCs, seeing multiple incubators / accelerators on a slide deck is a big red flag. In particular, seeing more than one equity-taking program on your slide deck makes me wonder:

Are you addicted to accelerators (like the startup equivalent of being a professional student)?
Did you not learn the material the first time?
Why haven’t you been able to generate enough revenue / raise enough capital that you need to keep doing this?
How messed up is your cap table…?

This is how most investors think about things:

0 or 1 incubators / accelerators: cool
1 local / unknown incubator + 1 prominent accelerator: cool (e.g. SmallTown Startups followed by YC)
Multiple local / unknown incubators and/or multiple prominent accelerators: I have questions…

The only exception is non-equity programs (e.g. Creative Destruction Lab, 48 Hours in the Valley, Government-funded programs, etc.). These are generally useful and not held against you, but they also don’t show any particular signal to investors — so consider leaving them off your slide deck entirely.

2. More Advisors Than Employees

Nothing sets off a VC’s warning system quite like a team slide with 2 cofounders and 6 advisors.

I get it — when you’re just starting off, founders grasp for anything that will make them seem more credible. Big name advisors on the team slide do that, right?

What if you saw someone’s online dating profile and it had…