Do VC firms talk to each other abt what companies they are meeting with?

Question

I recently got approached by a well know VC firm about a very early state startup that I'm building. Since, there was a conflict of interest (they already invested a player in the same marker) he was clear n very upfront about it. The junior VC I met with was very impressed and said that he would love to connect me with the senior team if I want because had some really great ideas. Next day, I woke up and find messages from 2 of the biggest and well know VC firms of Silicon valley asking me if I am interested in meeting them this coming week. Is this just a coincidence or these people also have moles on the inside?

davismwfl · Accepted Answer

When they are competing for a deal, they aren't talking to each other in this way. But it does happen that they will refer or intro you to others even if they themselves decide to pass, as long as they pass for a technical issue and not a bad idea/market/traction etc.In your case it could be coincidence but I doubt it. More likely the junior VC (or the partner he spoke with) reached out to a friend or someone they know at the other firm(s) and said hey this looks interesting but we haver to pass for X reason. A VC's goal is to make money, even if you are a competitor to one of their holdings you being in market with a great product helps their holding too. People think the lack of competition is great, it isn't, having competition in market is much better. It lowers cost of client acquisition for everyone and increases awareness so it isn't all on one company (or VC) to fund. VC's know this.

caseyf7 · Answer

My anecdotal experience is the junior VCs tend to form small groups and share deals with eachother. This works because they are measured on deal flow so it is more important than competing. They know who the senior partners are competing the hardest against so they usually won&rsquo;t collaborate with those firms as much.