Blank is a long time entrepreneur and co-founder of the enterprise software developer E.piphany. (Remember the bubble days!) Blank also participated in a video games company more than a decade ago called Rocket Science Games, which he describes as one of his craters.
In a post on his blog late last week, he recounts a meeting with his two key Rocket Science venture backers (unnamed) in advance of a board meeting. On the agenda for the board event was another round of financing for the struggling company.
“I liked my investors,” writes Blank. “I’d known them for years; they were smart (and) trying to figure out the video game market with me.”
Assuming the lunch was a social call, he was unprepared when both firms announced they were going to pass on leading a new round of funding. “I was speechless,” he writes. “I felt like I had just been kicked in the gut and stabbed in the back.”
Blank says the news was an expensive reminder that he “was just one of 20 companies in their current fund portfolio.”
His tale reminds me of other stories I’ve heard from entrepreneurs, some who raise their voices and quickly use of phrases such as vulture capital, others who felt lured on with platitudes but never funded.
The bottom line is this: business is business. While many VCs spark wonderful relationships with their entrepreneurs and become long term friends, the truth is money talks. Friendship takes a back seat.
As to Blank’s experience, he adds a postscript. Despite the difficult incident, 15 years later the two VCs have become friends. “We have lunch often…and swap war stories of the day they pulled my funding.”