VC Cliche of the Week
You work on something for months.
You get emotionally involved.
You really want to make the investment.
But you can't get the price and terms you want.
What do you do?
You Walk Away.
Walking away from a deal is one of the hardest things to do as a VC.
They teach you in business school that you should never consider the "sunk costs" when making a business decision.
But emotionally that's impossible to do. If you've put hundreds of hours into something, you naturally want to see it to its conclusion.
But you have to have discipline in business.
You have to draw a line, really any line will do, that you won't cross.
Sometimes that line will be drawn in the wrong place.
And you'll miss something you shouldn't have missed.
But the discipline of having a target price that you'll pay is important.
You can't just keep raising it because that's what it takes to get the deal.
Because eventually you'll be paying prices that don't make sense.
I've said this before and I'll say it again.
Price matters. If you can't make a deal in your price range, walk away.