Founders take to X to share venture capital horror stories

A wave of startup founders spent the week sharing venture capital fundraising stories on X, turning a familiar topic of private complaints into a highly public discussion.

The conversation began after entrepreneur and podcaster Greg Isenberg recounted a pitch meeting with a leading venture capital firm in which one of the partners fell asleep.

“I was once pitching in a board room at a top 3 VC firm for a $15M Series A. 12 people in the meeting. One of the GPs fully fell asleep. Out cold for 30+ minutes. Nobody acknowledged it. Everyone just kept going,” Isenberg wrote.

His post prompted hundreds of responses from founders and investors describing their own experiences.

Sleeping through pitches proved a common complaint

Many founders said investors had fallen asleep during presentations.

Among them was Zynga founder Mark Pincus, who said he continued presenting after consulting the friend who had arranged the meeting.

“It was ‘weekend at bernies’ meets Silicon Valley,” Pincus wrote.

Former WayUp chief executive Liz Wessel, now a partner at First Round Capital, said one investor slept through her Series A presentation while another appeared unhappy throughout the meeting.

Despite that, the firm later offered funding.

Wessel said her company declined the offer.

The stories became so widespread that former Andreessen Horowitz partner Arianna Simpson joked, “Are VCs ok?? Narcolepsy appears to be running rampant.”

Term sheets withdrawn and founders ghosted

Other founders described deals that fell apart after investors had already committed.

Some said venture firms:

• Signed term sheets and later backed out.
• Stopped responding before wiring funds.
• Continued requesting company updates despite not investing.
• Asked to serve as references.
• Sought a share of acquisition proceeds despite not participating.

Uber co-founder Travis Kalanick recalled pursuing an investor who was leaving a meeting and pitching from the passenger seat of the investor’s car.

Matthew Prince shares stories involving Sequoia and Vinod Khosla

Among the most widely discussed posts came from Cloudflare co-founder Matthew Prince.

Prince said a partner at Sequoia Capital declined to invest in Cloudflare because the investor believed a woman could not lead a cybersecurity infrastructure company.

The comment referred to Cloudflare co-founder and chief operating officer Michelle Zatlyn, according to Prince.

Cloudflare now has a market value of about $87 billion and is expected to generate $2.8 billion in revenue in 2026.

Sequoia partner Shaun Maguire responded that he had long admired Zatlyn and asked Prince to reveal the identity of the investor.

Prince declined.

He also recounted an encounter with investor Vinod Khosla, saying Khosla suggested he remove his co-founders and keep their equity.

“I think the charitable read was it was a test of my character. But I was so offended that we never spoke again. Literally blocked his number,” Prince wrote.

He later added that Khosla had been an “incredible investor” with a strong track record, though not someone he would choose to work with.

Khosla’s account of the conversation was not included, and recollections of such discussions can differ.

Andreessen Horowitz meeting caught founder off guard

Not all stories portrayed investors negatively.

Prince said he expected an informal meeting with Marc Andreessen, only to discover that the venture capitalist had arrived with his full investment team prepared to evaluate the company.

Prince said he was unprepared and failed to impress.

“I framed the rejection letter they sent,” he wrote.

Humor mixed with criticism

Some stories focused more on unusual experiences than disputes.

Investor and founder Julie Fredrickson said an associate at one firm warned her before a meeting about a rock formation visible from the office window that resembled male anatomy.

“The firm will forever in my mind be Dickrock Ventures,” she wrote.

Despite the criticism directed at venture firms, several entrepreneurs said they had positive experiences with investors.

Pincus said the public discussion showed founders no longer felt compelled to stay silent about poor treatment.

“I f*cking love this moment, when founders no longer have to be afraid to call out VCs for dumb behavior,” he wrote.

TL;DR:

Startup founders spent the week sharing fundraising stories on X, with complaints ranging from sleeping investors to withdrawn term sheets. Some entrepreneurs, including Cloudflare’s Matthew Prince, named prominent venture capital figures in their accounts.

AI summary:

• Greg Isenberg’s post sparked a flood of VC stories on X.
• Sleeping investors were among the most common complaints.
• Founders also described withdrawn term sheets and ghosting.
• Matthew Prince shared stories involving Sequoia and Vinod Khosla.
• Some founders said they had positive experiences with investors.