At Forum Ventures, we pride ourselves on really getting to know the founders we invest in, and creating (what sometimes is the only) space for them to drop their front and be vulnerable. As a result, we often get texts or calls in the middle of the night from our portfolio founders with urgent, confidential, and even sometimes what they feel are “embarrassing” questions. This series chronicles example founder texts and how we answer them.

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This is a tough spot. You don’t want to get greedy since you have a real offer on the table, but you also don’t want to kill your chances at a potentially better partnership with another VC.

Assuming the terms will come out roughly equal and we’re talking about the second VC being a better holistic partner for your growth, I’d recommend a two-step approach. 

Step 1: Stall the first VC (legitimately)

First things first: don’t lie. Ever. The VC world is small and word gets around fast. It’s not worth risking your reputation. 

The key to this step is delaying the process in ways that are fair to everyone. Here are two options I recommend: 

1. Ask for time to review the details with your lawyer: This should buy you a day or two and is a very legitimate ask. 

2. Ask for time to speak with a founder or two in the VC’s existing portfolio: This could buy up to a week, depending on scheduling, and give you a better sense of how this VC works with their portfolio companies.

If the VC won’t give you the time for either of these asks, I see that as a red flag and I would caution you to consider whether this is truly the partner you want on your cap table at all. 

Step 2: Pressure the second VC (respectfully)

Get in touch with the VC you’re waiting on and lay it all on the table: be up front that you want to partner with them but you also have a term sheet in front of you that you need to respond to. 

From there, be direct with your ask: You need them to make a decision more quickly in either direction. If they aren’t going to move forward, you can choose the first VC with a clear conscience. If they want to move forward, you need to see a term sheet as soon as possible. 

If you have current investors that are connected to the VC, ask them to reach out via a back channel to encourage the conversation on your behalf. They might be able to accelerate things or get you a more fleshed out update of something going on behind the scenes that the VC can’t disclose publicly to you.

If they have a good reason for needing more time, take a step back and focus on diligencing the first VC. In all likelihood, the timing will work out. So don’t stress if they really do need the extra few days. 

Don’t stress, it will work out 

The VC that is ready to jump at the opportunity to invest in you might actually be the better VC for you in the end. The diligence you’ll be doing while you “stall” could end up swaying toward them. And while you might think you want that other one, they could end up being a mismatch. Check your reasons for wanting the one who is taking more time – is it because of their brand alone? Or did you really enjoy the people behind the brand? All this to say, it will work out. Do your diligence, trust in the process, and trust your gut. 

Don’t forget about your company in all this

I know this is a highly stressful moment for you as a founder, but also remember you have a business to run. Follow these two steps to keep the VC side of things moving, and in the meantime focus on building your company and team. 

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