I attended a meeting not too long ago that was sponsored by a local venture firm, for an audience of entrepreneurs.  They wanted to more fully explain their selection process.  They went through their elaborate process - explaining how an entrepreneur needed to develop a champion inside the firm, and how they might go through several iterations of asking for more information - or setting new milestones for accomplishment.  (The graphic was basically an iterating flow chart - like we used to have to make for beginning CS classes - whenever you came to the box that said "invest - NO, you went back into the process!)

They said that this all indicated to an entrepreneur that "they were interested".  As I watched this, my stomach churned.  Pity the poor entrepreneur who, desperately trying to keep their company together, working hard to raise money, keeps getting bumped backward in the process to "do something else" or "prove something else", never getting any money!  All the while thinking that "soon" they would get the investment - after all this work and effort! I thought to myself "to the entrepreneur this is just being strung out until they DIE!"

A few minutes later, the partners described how, in their words, they had "mentored" in this way, a local entrepreneur who went on to take his company public.  However, in the TWO YEARS that they "mentored" him - THEY NEVER INVESTED IN HIS DEAL.  Too true, this poor entrepreneur worked with this firm for TWO YEARS and they never invested in his deal.  Unfortunately for the firm, the entrepreneur did a stellar IPO, and they didn't get a piece of it - but plenty of out of state VCs who didn't "mentor", but instead "invested" DID get a piece of it. 

This firm is well meaning - they genuinely believe that the process they described is a good one - and want the entrepreneur to understand that they are just getting comfortable with the deal - but entrepreneurs should be warned - just because you get the meeting, or the follow on meeting, or another "milestone" to accomplish does not mean that you should continue to work with a firm.  Sometimes it's important to fish or cut bait.  Too many entrepreneurs get strung out until they do die - or until they're fodder for bottom feeders.  If your potential venture investor is not making significant progress - move on to the next opportunity - there are a lot of investors, and as our IPOing CEO demonstrated - the VC's who INVEST get the juicy returns!