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Do Stealth Startups Suck?
glinden writes "In 'Stealth Startups Suck,' Bloglines CEO Mark Fletcher argues that 'stealth mode for a web start-up is the kiss of death.' He says that moving quickly and getting feedback from early users is much more important than protecting the core idea or trying to launch a perfect product. Is there any good reason for a web startup to not be open about what it is doing? What about other kinds of software startups? What about hardware startups?"
Stealth Startups Don't Suck
Having worked with a couple of specifically-focused VC's (content management) before, they show a strong preference for people referred to them by mutually-known acquaintances. Rationale being that these third parties have/will do a bit of filtering before referring them on. Most have no lack of ideas sitting on their desk; they don't have a lot of time to do sanity-checking and even basic background research for the various segments the entrepreneur wants to operate in. The obvious BS can be thrown out pretty quickly (and it is indeed pretty obvious). Everything else kind of waits around, unless it has a champion pushing it, preferably one with some kind of track record with the VC.
I actually asked a few of them about whether this was a common trait or their own idiosyncracy; based on their comments, this would appear to be SOP througout their community.
So you can take your chances with cold-calling. However, your time would probably be better spent networking with entrepreneurial types, IMHO.
NDA--agree with the parent. Lots of legal and practical headaches associated with an NDA, the biggest being that the VC can't (legally, at least) sanity-check the idea with his/her brain trust under NDA. Don't bother. If you're truly paranoid, don't try to approach VC's with a track record of funding potential competitors.
I do also concur with the parent that there's lots more money available to be put in play now than in the last few years. So get out and start schmoozing, inventors!
It's true, there's a lot of money out there. The easiest way to connect to VCs is through networking. If you don't have personal contacts, the easiest way to network is by retaining a law firm that represents a lot of VCs and venture-backed companies. I'm constantly reminded by our VC clients to send them potential investments. (I like my anonymity here, so I'm not going to name my firm.)