I recently sized up a startup and passed on it via email. I didn’t talk to the founder. I don’t know what they looked like, etc. 

Instead, I read their company overview and asked a series of questions, then made a conclusion as to whether or not Tundra Angels were interested in pursuing the startup. I then communicated to the founder the following: 

“Thanks for the detail. It’s too early for us to engage. We tend to engage further when there is a product in market with active customers.”

I got this response from the founder:

"It's a shame how many orgs like this quickly dismiss folks. Take care Matt."

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Now, I don’t like this dynamic. The founder spent precious time on their email exchange, sharing what they are doing, etc.

For the founder, when investors size up an opportunity like this quickly, it comes across as insensitive. It also defies human nature relational norms. It's not rational human-expected behavior to be disqualified after a series of emails.

This is what kills me - what I didn't like being done to me as a founder, I am now giving to founders as an investor. 

I'm happily married with several kids so I'm not on Tinder. But from what I hear and read about Tinder, a match is based on one single variable - how attractive that person is.

When swiping left or right, Tinder does not account for the other person's personality, their interests, their emotional intelligence, everything else that actually matters about being in a relationship with that person.

The investor’s quick-look pass acts like the startup’s version of Tinder. 

But let me tell you something:

✅ The quick/Tinder-esche pass is often not because of your startup.

It’s often a situational problem. ✅

Let me explain. 

✅ Investors have three major constraints:

Investors find themselves in a tremendous imbalance - 

Venture capital is a model where the capital goes to a very select few. 

To use an analogy, if the needles in the haystack are the startup investments that a firm makes, and the straw is a startup. 

In practice, venture capital is like the investor is looking for a few needles in a haystack when more and more straw continues to be added to the pile. 

✅ Here is why this is important - because each startup is seen as in comparison to the other in the consideration set at that snapshot in time. ✅

Investors don’t compare other deals that they saw 12 months ago. That deal has come and gone. The market was different. Everything happens in the context of a snapshot in time. See my article on The Best Startup in a VC’s Consideration Set.

It is a very rare for an investor to settle their thinking. There are always new startups entering the funnel to pay attention to. Then there is an inbound of facts to challenge your existing thinking on the startups that you’ve reviewed.

Yet, it is the investors’ job to go through the proverbial pile of straw. An investor can't just avoid the proverbial hay bale. Going through the straw is the investors’ job. It is one way how the investor finds opportunities that others do not see.

Investors think about the opportunities that they are seeing but equally always think about which opportunities they are not seeing, and how they see them. 

So they are forced to go through the entire set of deal flow, the bale of straw, to ensure that they are not missing a needle that they should pay attention to.

The high inbound of startup demand is compounded because there really is no true investor ICP. 

In customer prospecting, startups can target and qualify leads those who have a similar problem - based organization, department, role. It tends to be much more clear cut. "We sell to radiation oncologists," in the case of AIQ Solutions. Or, "B2B tech companies that want turn-key credit products," in the case of Upward Financial.

Upon reaching out to the lead, startups qualify the customer, ensure it is a fit with their product, then reach out. You're not going to sell physical therapy software to the Partner at an accounting firm.

But when startups approach investors, the investor ICP is way more fuzzy. VCs don’t have use-case based roles where you can qualify in the same way. It is much harder for startups to get insight into the opportunities they are seeking. 

Worse yet, VCs are terrible at marketing, touting on their website that, “We invest in bold, audacious founders at the intersection of AI and the future of work.” What the heck does that mean?’” The founder thinks to him or herself, “Well, my algorithmic bond trading startup could fit into the future of work of bond traders, so I’ll submit the form or reach out anyway!” Speaking as if I thought that once... 

Furthermore, the startups’ industry doesn't easily fall into categories that investors lay out on their website. I remember in particular there was one particular venture capital firm that only focuses on investments in the capital market space, maybe there are more now. I ran a bond trading startup. Of course, I wasn’t only going to solicit investment from that one firm that has a much higher likelihood of investing in us. I have to cast a wide net. It's a numbers game, after all.

On the fundraising motion, lead qualification is less clear cut. So, founders tend to just reach out, and then see what sticks. This isn’t necessarily an optimal strategy, but given what I laid out above, what other good options exist?

I get about 15 cold emails a day from startups that do not fit our thesis. Most investors get many tens to hundreds a day.

The lack of the investor ICP contributes to the startup demand that is not a thesis fit.

Both of these factors above are handled by a small investment team with severe time constraints that need to find those needles in the haystack with a limited time frame. 

Venture funds have a time frame to deployment. By their fund size, capital reserves, and fund life cycle, there are a specified number of deals that they do annually in order to hit the return time-frame that they laid out to their LPs.

Or, maybe it is an angel investor network like Tundra Angels. Managers like myself have a constant need and pressure to continue to surface good deal opportunities for the network to see. If we don't bring good deals forward and invest in them, we don't have a line of work anymore. There is a constant pressure to deliver value in the form of solid startup opportunities and investments. It is sometimes exhilarating. But it is often stressful. 

It’s a team of 3-4, or 6-8 combing through thousands of deals, depending on the thesis.

Straight up, venture capital has a dynamic where every touch point on a startup deal that isn’t going anywhere is time you could have spent in other ways. 

Practically speaking, this is also why investors do not willingly give startups in the form of meetings. 

Net net, this is where the quick-look pass comes in.

Because of the above factors, the investor is faced with several choices, none of which are optimal:

As a Founder, I pitched Y Combinator through a startup accelerator program, gBeta. The YC Associate must have liked me enough that she connected me with the YC Partner who oversaw the FinTech investments. The Partner's name was Aaron Harris.

I was still getting into the startups and venture capital world at this point in my journey, and wasn't accustomed to this "quick-look pass" mindset that investors possessed.

So, upon getting introduced to Aaron, I fully expected that he would move to set a meeting to discuss. That seemed like a reasonable and logical step. It never occurred to me that  we wouldn’t have a meeting. 

Aaron and I got connected via email, and he immediately started asking questions via email about my business. He asked questions like, do we have a technical co-founder, and what stage of the product are we in, etc.

I answered the questions, then requested to set up a time to chat.

He replied to my email answers with more questions, not specifically addressing my request for a meeting. 

I answered those questions in my next reply, and continued to ask for a meeting.

He responded with even more questions and also had some summary remarks about my startup and our situation - we really needed a technical co-founder to be relevant for Y Combinator, the market that we were in seemed to be a challenging and lower-growth market.  His conclusions were largely true, but there were a few layers of context that were relevant that I never got the chance to explain. So, I offered to have a call to clarify. 

But, I never heard back. “That was it,” I thought. 

The blitz of the email exchange to then end in a “If I were you” piece of advice was something that I didn’t understand fully at the time. And it bothered me.

But now being on the investor side, I see the broader context why this happened the way it did. I still don’t like it. Admittedly, it often feels wrong. But with the supply and demand imbalance, the lack of an investor ICP, and the small team with severe time constraints, it’s often not a startup problem, it’s a situational dynamic.

In the case of the founder that I did a quick pass to via email, this was not a high growth business. This was something that was never going to be a fit for Tundra Angels.

Did I need to respond? No, but that's not how I roll. And not how I would want it done to me. So I have a “no ghosting” policy.

But as Tundra Angels has developed its brand, I have way less bandwidth for one-on-ones than I did in the past such as in the year that I founded Tundra Angels. Success breeds success, which means more inbound and things to react to.

So I find myself doing more qualification via email, not because I want to, but because I find it necessary.

Take my situation and extrapolate across the investor conversations and touch points that you've had.

But use these constraints that investors face to stand out.

On a recent call, a founder told me something that I appreciated. This founder said, “Hey Matthew, I just want to tell you that I really appreciate the time that you've given over these conversations with me. I value it, and I know whatever happens between us and Tundra Angels and my company, just know that I have really appreciated these conversations.”

We're still considering where we stand on that company, but I know that this founder ended the conversation on a really high note. I truly appreciated it as a human to know that this founder knows that time is one of our most precious resources.

Venture capital may act like Tinder. But that doesn’t mean that you can’t make an impact on the investors who are swiping.

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