Let’s talk about the SHITS.
Nothing like potty humor to get your attention. In all seriousness, SHITS is an acronym I heard along the way that perfectly describes the VC slow roll. It stands for Show High Interest Then Stall. This is a legitimate venture capital strategy, even if unintended. It’s less effective in coastal fast-close environments, but still happens with great frequency throughout the country.
The rationale behind this, from the VC perspective, is that before I write a check time is my ally. As soon as I write a check, time is my enemy. The longer I’m on the sidelines the more information I get: the more I learn about you, your company, competitors, traction, and team. I may be genuinely interested but if there is no immediate need to commit to a round, I’m going to sit on the sidelines, and wait, and watch.
When an investor has conviction they will give you a firm no, a firm yes, or even a conditional yes, such as “as long as we can hit our ownership percentage, we’re in whenever you get a lead.”
Unfortunately, the most likely scenario and one you may be accustomed to getting is the SHITS. This is not the mark of a bad investor, just one that lacks conviction about your opportunity. You can’t force conviction, but you can drive action.
You can drive action to a decision in a few ways. First you can ask direct questions about what it takes to get to a “yes.” Next you can show additional interest in the round—and I’ve talked about this in previous episodes. When a round is coming together I need to know if I’m going to get off the sidelines and get in the game, or pass altogether. And finally, you can drive action through deadlines. There’s nothing like a deadline to get people to take action—on anything.
When you have enough interest, including from VCs giving you the SHITS, set a deadline and start pulling the round together.
Listen to the whole episode here:
Startup of the Year Podcast Episode #0050 – Meredith Fineman Teaches Us How To Brag Better
On this episode of the Startup of the Year Podcast, we listen to Frank Gruber’s interview with Meredith Fineman at the Startup of the Year Summit in the fall of 2020. Meredith is an entrepreneur, writer, best-selling author, speaker, podcast host, and women’s advocate. She is also the founder and CEO of FinePoint, a leadership and professional development company with a focus on visibility and voice.