Founders share VC horror stories, some name names

Asking venture capitalists to invest is a rite of passage for technology founders. This has led to another global experience: the venture capital horror story. There was a huge conversation sharing stories like this all week on X with funny and infuriating comments. We read them all to find the most interesting ones so you don’t have to.

Greg Isenberg, an emerging podcaster, newsletter writer, and founder of Late Checkout Studio — a holding company whose previous projects include a company acquired by WeWork — started the conversation with a story about a venture capitalist who fell asleep during a pitch meeting. Isenberg has a large following on X, and his post clearly struck a nerve.

“I was once presenting in the board room of a top three VC firm for a $15 million Series A. 12 people attended the meeting. One of the GPs fell asleep. He was out in the cold for 30+ minutes. No one acknowledged it. Everyone kept working,” he shared on X.

Venture capitalists falling asleep during pitch meetings was the most common horror story shared. Not just sleepy, but full in the zone.

Zynga founder Mark Pincus told his VC-sleep story. “I looked at my friend who had arranged the meeting and asked me if I should still do the show, and she said yes. It was Bernie’s Weekend meets Silicon Valley,” he wrote.

Interestingly, sleep does not mean that venture capital will not invest. Many founders have reported that they have received term papers from partners who fell asleep during the pitch.

“I once pitched a partnership in 2015 for our Series A where one partner (a famous Midas listener) fell asleep and the other couldn’t stop pouting. I got a call two hours later from IC that they were sending out a term sheet,” Liz Wessel, who co-founded and sold HR startup WayUp and is now a partner at First Round Capital, said her team didn’t take the money — and that the VC was blindsided.

There have been so many stories about VCs falling asleep, that former a16z partner Ariana Simpson wrote: “Are VCs okay?? Narcolepsy seems to be spreading.”

There have, of course, been more than a few stories about VCs signing term sheets and then pulling out at the last minute, or never sending the money at all. The most infuriating part? It appears that some of these VC firms continued to treat founders like portfolio companies anyway, asking for company updates or to serve as a reference. One founder said the VC even wanted a share of the post-acquisition proceeds.

Travis Kalanick, the famously persistent Uber co-founder, told a story about discovering that the venture capitalist was trying to hide the meeting and leave the building. Kalanick said he followed the VC to his car and got out of the passenger seat.

Not everyone had bad experiences to report. Some founders said they’ve had nothing but great experiences with VCs, and some even shared love stories about specific investors. Yes, most VCs work hard, genuinely try to be helpful, and don’t nap during meetings. But bad experiences are so common that Pincus exclaimed, “I love this moment, when founders are no longer afraid to call out venture capitalists for their stupid behavior.”

The most amazing stories

However, the stories that really impressed were the ones posted by Cloudflare founder Matthew Prince. “One Sequoia partner dumped Cloudflare because he didn’t think a woman could lead a security infrastructure company,” Prince wrote. The woman in question is Cloudflare co-founder and COO Michelle Zatlin. Considering that Cloudflare is now an $87 billion market cap company, with projected annual revenues of $2.8 billion in 2026, the ruling has not aged well.

Sequoia’s partner, Sean Maguire, who is no stranger to controversy over his statements himself, responded that he has always admired Zatlin, and asked Prince to reveal the name of the partner who said that. “Maybe we’ll have a drink someday,” Prince said. “But I bet you have a really good guess.”

But wait, the prince ate more!

He told a story about prominent investor Vinod Khosla, who offered to invest and then, according to Prince’s recollections, suggested to the founder that he “fire” the co-founders and take their shares. “I think the charity reading was a test of my character. But I was so offended that we never spoke again. We literally blocked his number.”

Prince was quick to add some nuance about Khosla: “He’s very smart/intelligent. He was a great investor – can’t argue with his track record. But not the person I would choose to work with.”

It is worth noting that memories of hadiths tend to vary, and we do not know what Khosla actually said, meant, or remembered. But eyes popped at such an open talk about one of the most successful and powerful venture capital firms in the valley. Many people described Prince’s outspokenness as an example of having “FU” money. Prince, of course, is a billionaire these days.

Not all of Prince’s stories portray venture capitalists as the villains. Specifically, he was believed to have arranged a simple meet-and-greet on Monday with Marc Andreessen, co-founder of venture firm a16z. Instead, Andreessen showed up with his entire investment team, ready to impress. The unprepared prince did not impress him. “I drafted the rejection letter they sent,” he said of the outcome. Others told similar stories of meetings with Andreessen and his company.

Perhaps the funniest story came from Julie Fredrickson, the founder-turned-investor, who received a phone call from a venture capital partner before arriving at the firm’s office — warning her of a rock formation visible outside the window that, apparently, unbeknownst to the investors inside, was shaped like male genitalia. “The company will forever be Dickrock Ventures in my mind,” she wrote.

While Valley venture capital funds have come under intense pressure, the founders shared incidents involving international venture capital funds as well. Some venture capital firms have also talked about pitching their ideas to limited partner investors.

The topics are worth reading not just for the laughs, but also for what they reveal: the fundraising process is murky, the power dynamics are real, and the experiences founders secretly whisper about are far more common than the industry tends to publicly acknowledge.

Perhaps Eisenberg explained the moral behind all these stories best. “If you’re uploading right now, just know that every founder has a story like this. The process is weird. The power dynamic is weird,” he wrote.

The second lesson might be: If Andreessen agrees to meet you, he means business.