Quora Q&A

Is it ethical to share the same idea/concept or business plan with 2 VCs at the same time? And Why not?

Jon Pincus

Yes, in fact this is standard behavior. This is very much in the entrpreneur’s interest: you want to get multiple investors interested to give them incentive to put term sheets on the table — and ideally to compete on valuation or terms. A couple of caveats: you don’t want to shop an idea too broadly; and if you’re going for ‘top-tier’ VCs, it’s potentially counterproductive to be actively engaging with the weaker VCs.

Barry Hurd

Yes, it is ethical to share the same idea/concept with multiple VCs.

As an entrepreneur looking for investment, you are responsible for reaching out to as many relevant and qualified investors to earn that investment.

In many cases VCs will talk shop with other investors and see if they have relationships with other investors in the category. If they don’t have those relationships, the VC will be a hard negotiator as they act under the idea of being the “only player at the table”

You also have to do a little dating. If you are just looking for cash, you are doomed to a bad match. An entrepreneur needs to date multiple VCs and look for budget, good terms, culture, industry experience, and relationship network.

During the due-diligence phase on the entrepreneur side, check out some of the less known companies in the VCs roster. You may get star-struck by some brand name that is at the top of the list, but the unknown start-ups on the VC portfolio are going to tell you what they got, what worked, and what didn’t. This is where you can start disproving the empty promises some VCs are known for.

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