Decoding what 'We're Open For Business' really means, and why every VC is using that line: 0/

1/ First, it technically means a fund has dry capital, has the ability to invest in new companies, and is taking new meetings...

2/ It does not mean they are investing in new deals, and certainly not at the same pace as previously.

3) Firms are focusing most of their attention (time + capital) on current portfolio companies, as many will need runway extensions. (snowball effect of downstream capital not writing many new checks)

4) A VCs biggest nightmare is being cut out of future dealflow, and not staying on top of market trends

5) It will be difficult for many to make a sizeable investment without meeting an entrepreneur in person. So who is getting an investment?

6) The founders most likely to get investments are repeat entrepreneurs, those with existing networks (have already met in person), and those who have previously pitched that investor.

7) I fully appreciate this will make the access + diversity issues worse. I am not endorsing it, just stating what I believe to be true.

8 ) So what to do if you are a founder that needs to raise? First, extend runway as long as possible. Then focus on firms/individuals that you've already gotten to know, ideally in person. Third, start building relationships with new folks, with intention of closing later...

9) And ask questions. Do you have dry powder? How have you shifted reserved in this environment. Have you ever invested w/o meeting a founder in person? Will never get perfect clarity, but better than 'of course we're open for business'