Do compressed, high-speed fundraising and deal processes produce worse investment outcomes than slower, deliberate ones?

Frank Rotman · Aug 26, 2021

The compression of diligence periods in today's market undermines firms like QED that win deals by demonstrating their operator value during diligence

QED historically won by asking questions and helping founders think during diligence, so founders realised within two or three conversations they were different; with diligence now optional or check-the-box there is little time for that to happen

Scope: specific to QED's approach

37:52 20VC: Has Price Discipline Disappeared? Is it Possible to Build Ownership Over Time? Why Venture Is Less Collaborative Now Than Ever? How fast Do Breakout Companies Become Obvious? How To Construct an Optimised and Repeatable Investment Decision-Making Pr

David Tisch · Feb 27, 2023

The speed-driven, transactional turn in venture across seed, A and B was corrosive because it removed the relationship building that lets investors actually help companies

Deals closing in hours to days leaves no time for founders and investors to know each other well enough to know how to ask for and give help

Scope: he participated because it was the game on the field; framed partly as a fulfilment issue, partly as a long-term support issue

44:37 20VC: How Multi-Stage Funds Changed The Game For Seed Rounds, Why Signalling Risk is BS, The Three Most Important Variables for Founders When Raising Rounds & A Debate on Portfolio Construction: Does Ownership Matter with David Tisch

Harry Stebbings · Nov 27, 2024

The industry has become transactionalized, giving investors far less time to build relationships and conviction with founders

Founders now approach investors saying they will decide within days

Scope: stated about the founder side of the market

9:38 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar

Harry Stebbings · Oct 27, 2023

There are lessons from the last cycle that the industry should have learned and seemingly hasn't, including among pedigreed investors at top firms

He is seeing decks for ridiculous rounds led by experienced investors who should know better

34:44 20VC: The Three Types of Seed Round Today, Why Seed Has Never Been More Competitive, Why Pricing Has Never Been Higher, Why Boards at Pre-Seed Can Be Helpful & How Too Much Cash Too Soon Can Harm Companies with Ed Sim, Founder @ Boldstart

Trae Stephens · Apr 3, 2024

The market is repeating the same excesses it acknowledges in retrospect — 'we're doing the same stupid stuff all over again'

It's easy in hindsight to say things got out of hand, yet the behavior recurs

0:00 20VC: Founders Fund's Trae Stephens on Why The Most Competitive Deals are the Worst, Why No Company is Successful Because of their VC, Why We are Making ZIRP Mistakes Again Today, Why Loss Ratio is BS and Upside Maximisation is Everything

Harry Stebbings · May 8, 2024

The irresponsible investor behaviour of the ZIRP era has not changed — the same dynamics are visible today in 1000x ARR rounds for Gen AI companies

Excess supply of capital is again pushing money onto founders at unjustifiable multiples

43:07 20VC: GV's Tom Hulme on Why Investing in Foundation Models is like Investing in "Power Stations", The Conventional Wisdom in VC that is BS & Lessons from a 24x Angel Track Record, 255x on Robinhood and Making Billions on Uber

Kevin Hartz · Jul 22, 2024

Essentially every investor made mistakes in 2021-2022

58:51 20VC: How I Lost Airbnb at Seed Because of an Exploding Term Sheet | Investing Lessons from Roelof Botha & Peter Thiel | Why VC is Less Collaborative Than Ever and Great Companies Are Being Destroyed by Too Much Cash with Kevin Hartz @ A*

Taavet Hinrikus · Apr 28, 2025

A lot of deals in 2020-2021 were done under extreme time pressure, and some the speaker personally did resulted in big losses

He personally did some of those deals under the gun and they lost money

Scope: speaking from his own personal investments

29:38 20VC: VCs are Spreadsheet Monkeys and are Commoditised | Why Fees and Carry Misalign GPs and LPs | Why Founders Will Realise Multi-Stage Funds Damage Seed Rounds | Why We Need European Sovereignty More Than Ever with Taavet Hinrikus

Larry Aschebrook · Jun 16, 2025

In 2020–2021 rationality left the market entirely, and G Squared was no exception — they kept deploying capital like everyone else

Scope: applies to both private and public markets

31:07 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Brian Halligan · Jan 15, 2024

Sequoia's diligence was exhaustive — after Jim Goetz's initial handshake, Pat Grady spent three months going through HubSpot's unit economics and every line of every spreadsheet before a term sheet

He experienced Grady bending his own schedule to absurd hours during diligence

51:01 20VC: Hubspot Co-Founder Brian Halligan on Leadership Lessons Scaling Hubspot to a $28BN Market Cap | The Best Series A Investment in Venture History & What Makes Sequoia so Successful?

Jake Saper · Mar 10, 2025

An intensive diligence process is a feature rather than a cost because it selects for the founders who actually want a low-volume, high-touch investor

Emergence sells a low-volume, high-touch product; founders who want a high-volume, low-touch investor who stays out of their hair self-select out

37:13 20VC: Lessons from Investing $2BN and Returning $8BN in Cash | Why Most Venture Partnerships are Broken | We Sold Salesforce Early and Lost Out on Billions | Are The Best Deals Always Expensive and Competitive with Jake Saper @ Emergence Capital

Immad Akhund · May 12, 2025

The top firms do far more diligence than everyone else, and founders should want that rather than a FOMO-driven term sheet

Across more than 20 funds pitched for the Series C, Sequoia did the most customer diligence, the most data room work and asked the best questions — he wants investors who truly believe rather than deciding lightly

10:50 20VC Exclusive: Mercury Founder Launches First $26M Fund | Why Founders Should Take the Highest Price | Why Serial Entrepreneurs are Better | Why AI Is So Overhyped | The Future of Venture Capital with Immad Akhund

Saam Motamedi · Jul 15, 2024

Deep pre-investment diligence remains possible despite deal compression if you build founder relationships before the company exists

He spent ninety days working daily with founders before a $6.5M check; roughly 80% of their investments come from people they met before the company existed

Scope: they still sometimes have to decide in forty-eight hours

31:20 20VC: Why We Are in a Bubble & Now is Frothier Than 2021 | Why $1M ARR is a BS Milestone for Series A | Why Seed Pricing is Rational & Large Seed Rounds Have Less Risk | Why Many AI Apps Have BS Revenue & Are Not Sustainable with Saam Motamedi @ Greylock

Markus Villig · Nov 13, 2024

Sequoia's process was unlike every other VC Bolt had met: they did all the diligence homework before approaching, asked only for metrics, and committed within 48 hours

They deliberately avoided being a burden on the company and executed on the timeline they promised, living up to their reputation

57:12 20VC: Bolt; The Most Insane Story in Startups | Turning a $5K Loan into an $8BN Company | Why Every VC Turned Down One of Europe's Biggest Winners | Competing with Uber & The Future of Micromobility and Self-Driving

Katherine Boyle · Oct 1, 2020

Compressed fundraising timelines do make discovery harder, but investors can still get depth by asking the founder to teach them, and demonstrating that you are learning is the most important part of the fundraising process

Founders can tell the difference between numbers-driven diligence calls and genuine interest, so the investor is effectively auditioning; founders will grant time even in a three-day sprint if they see real learning

18:02 Demonstrating genuine learning from the founder is the key to getting depth even in compressed timelines

Ophelia Brown · Mar 17, 2023

Moving super fast on deals is undesirable and the 48-hour term sheet narrative is a myth that firms perpetuate; the better approach is knowing founders for six to eight months before investing

She wants to see how founders work, execute and hire over time; her own analysis shows Blossom typically knows founders six to eight months pre-investment even though the investment decision is made early

6:48 Know founders six to eight months before investing rather than rushing to a term sheet

Taavet Hinrikus · Apr 28, 2025

The truly exceptional companies do not run ultra-compressed fundraising processes; fast-moving processes are a feature of momentum, spreadsheet-driven investing

30:24 Exceptional companies do not run ultra compressed processes

Will Quist · Sep 12, 2022

The most disturbing trend in venture is the shift from underwriting deals to competing to win deals

As capital (bullets) got cheap, the incentive changed from patiently underwriting one high-conviction shot to shooting at anything that moves and hunting in packs to be first to fire

25:38 Shift from underwriting to competing for deals is ventures most disturbing trend

Jason Lemkin · May 6, 2022

The compression of fundraising timelines is far less new than people claim — genuinely hot startups have always produced same-day term sheets

Even in 2013-14, and in his own first startup, standout companies already had term sheets by the time he met them; firms would pull partners down the hall and issue a term sheet over dinner that night

45:28 Fast same day term sheets for standout startups are not new just more visible now

Cem Sertoglu · Nov 20, 2024

Passing categorically on valuation is wrong, but passing because a rushed process leaves no time to understand the business is right

They will not be rushed into decisions they cannot digest, even though this means missing some good companies

28:38 Refusing to be rushed into decisions you cannot digest is justified even at the cost of good deals

Jeff Jordan · Jan 16, 2023

Investors should get as much personal time with founders as possible even in compressed timelines — dinners, reverse pitches — rather than writing checks in a single day

The judgment on a founder is personal, and compressed timelines are the reality of the market so you have to compress the process rather than skip it

37:38 Maximize personal time with founders even within compressed timelines rather than single day checks

Harry Stebbings · Jul 13, 2020 · hedged

The current velocity of funding rounds leaves investors insufficient time to understand a founder's psychology and assess their integrity

The speed of rounds and their execution compresses the time available with a founder

18:24 Deal velocity leaves investors no time to assess founder psychology and integrity

Chamath Palihapitiya · Jul 13, 2020

Integrity risk matters far less between founder and investor than between a VC and his or her own partners

In 2020 it is very hard for a founder to embezzle, fake a product or fake customers, and the work product is so iterative and tactical that integrity questions get answered continuously; partners in a venture firm have no points of demarcation and are only revealed in sporadic bursts, mostly around money, credit, ego and compensation

18:45 Founder investor integrity risk is low today the real integrity risk is between vc partners

Reid Hoffman · Jun 10, 2024

Calling someone who has known founders longer than you have is extremely valuable when you are deciding on an investment days after meeting them

It answers the questions a smart person would have after sitting with the project longer, which is what he does on every investment

61:59 Calling founder references enables fast confident decisions

Luke Harries · May 23, 2025

VCs should be investing faster right now; now is the right moment for Tiger Global-style rapid deployment, whereas the COVID boom was the wrong moment

AI models have unlocked capabilities enabling products that simply couldn't exist before, and companies are hitting $6-10M MRR within a year

54:53 Current ai moment justifies tiger global style rapid deployment unlike the covid boom

Adam Besvinick · May 29, 2023

The craziest thing of 2020-2022 was the fervor and pace of investment, more than the multibillion-dollar valuations at 1000x ARR

Those same funds are now course correcting to an extreme degree and slow playing deals, creating extreme whiplash for entrepreneurs

36:37 The pace and fervor of 2020 2022 deployment not valuations was the real excess and funds are now overcorrecting

Adam Fisher · Jan 22, 2024

The real problem in venture today is not founder NPS but the speed of fundraising decisions

It is speed dating where the outcome is a marriage proposal — founders are effectively adding another founder, and statistically the VC is more likely to be on the board than the co-founder is — yet the choice is made in two meetings over seven days

7:42 Fast decision speed not founder nps is ventures real problem

Adam Fisher · Jan 22, 2024

Extremely fast decision processes are acceptable for small checks alongside other VCs, but not for deals where you are the sole lead

With a small check others can take your place if you bow out; as the only VC leading you assume all the burden and cannot withdraw without ending the company, so compressing a fateful decision into days produces mistakes

8:40 Fast decisions ok for small non lead checks not sole lead deals

Shu Nyatta · Jul 31, 2023

Venture has fetishized speed, and speed simply isn't that valuable — especially at growth stage but also early stage

Exploding term sheets and demands to decide on limited information are made-up conventions; term sheets don't actually expire

50:54 Speed is overrated exploding term sheets and deadlines are artificial conventions