“What happened?” I persisted. “What did Frank say?”
“He seemed very positive when he walked us out at the end. He promised he'd be in touch.”
Well, he's a man of his word, but his graciousness did not tell me anything.
I watched Lenny at the counter, entertaining Connie. He was no doubt regaling her with news of the meeting and prophecizing a big check. She was practicing her active listening.
Notwithstanding their happy smiles, both Lenny and Allison actually looked spent from their morning. As these events go, they were probably only one of several auditioning teams on the roster at Frank's firm. The partners usually sit around an enormous, wooden conference table equipped with every space-age audio-video device known to man. Of course, no one ever knows how to use it all, and no matter how technically distinguished the founders, it always seems an eternity as the last-minute technical glitches are wrestled to the ground before the pyrotechnics begin. Eager young assistants enter at will, passing scraps of paper to partners. Partners leave, and new ones enter. As a presenter, you hope all this coming and going involves intrigues of dramatic proportions, but it usually means something more innocent—a partner's new Mercedes has arrived or arrangements need to be made to pick up the kids after school. In spite of the informality, the whole experience leaves many presenting teams feeling stripped naked. Sometimes a team never even proceeds beyond the first slide, as the inquisitors hurl unanswerable or painfully sensitive questions that cut through dreams with surgical precision. I have observed the ritual many times. Every day, in the lobbies of Sand Hill Road, scores of founders sit nervously waiting their turn with the dentist.
“Sounds like you sailed through without a problem,” I probed.
“Oh, I wouldn't say that,” she replied. “I don't know how these things are supposed to go, but there were lots of tough questions. They seemed tough to me, anyway. I'm not sure we answered to their satisfaction, but Lenny seems to think so.”
Lenny returned with Allison's black tea and his coffee.
I changed the topic. “Lenny never told me,” I said to Allison, “how you and he got together on Funerals.com.”
She smiled, more relaxed with this tack. “We've known each other most of our lives.”
They played together as kids. She had been born in Boston, but her parents moved shortly after to the Midwest. Times were hard, so she spent summers with her grandmother, who lived next door to Lenny and his family. Somehow Lenny and she became fast friends. She was a few years older than he.
“We lost touch when I stopped visiting,” she said. “We only ran into each other again eight or ten months ago.”
Allison, back in Boston for her grandmother's seventy-fifth birthday, learned that Lenny's father had died suddenly that week. The next day she attended the funeral and paid her respects. Afterward, she and Lenny fell into talking about the funeral and the complications caused by the fact that Jack's children, not to mention his many brothers and sisters, were scattered around the country. Lenny and Allison's discussions turned into exchanges of lengthy e-mails and then face-to-face meetings as they laid the plans for Funerals.com.
Allison, who held a master's degree in social work and had worked her way up over the course of eight years to head of marketing for a chain of funeral homes, knew the industry. Her knowledge and Lenny's fascination with the Internet formed the impetus for Funerals.com.
“Lenny's the salesman here,” she added. “He's had to carry all the water with the business plans and presentations.”
I asked Lenny, “Did you give them your funeral home pitch today?”
He shook his head a bit sheepishly.
“I told him I'd walk out if he did,” Allison laughed.
“Tell me what you thought about the meeting, Lenny,” I said.
“Meeting with you and working through your questions,” he began, “was like practicing for today's presentation, the main event. All the detail about markets and distribution went over just great.”
He went on to recount the meeting blow by blow, as Allison sat quietly. He had talked through his slides. There were many questions, he said, about the market and about how the funeral business worked now. They answered all the questions, and Allison and her knowledge of the business were invaluable. Frank was extremely helpful. He made sure key points were brought out and understood. Like Allison, Lenny put great stock in Frank's manner and words as he politely walked them out.
It was a mystery to me. The way Lenny described it, the presentation sounded like a lovefest. I began to wonder what Frank and his partners were putting in their own coffee. This didn't sound like your run of the mill VC presentation. Nor did it sound like the meeting Allison had started to describe moments earlier.
“And the tough questions?” I wondered.
“There were some tough questions now and then,” Lenny said, “but nothing we couldn't handle. I think everybody was happy with the answers.”
Allison's brow creased. “Frank was supportive,” she finally offered. “And they do seem genuinely interested in the market. I don't think they hear many ideas like this. I mean, I can't imagine too many hot, young Internet entrepreneurs are dying to work in the funeral business.”
Lenny laughed.
“But, Lenny, I thought Phil asked some questions we didn't fully address,” she said. She watched Lenny, knowing that she was contradicting him.
I knew Phil, one of Frank's partners—he's a wiry, intense, former academic noted for wearing suspenders and bow ties. He had taught engineering at Stanford before becoming a VC. “I think we handled them all right,” Lenny defended.
“But I was watching him closely while you were talking, and I don't know if he was …”
“Yeah, but Frank covered for us,” Lenny cut her off. “He'll take care of it. He was very upbeat at the end.”
“What did Phil say?” I asked, looking at Allison this time.
“Well,” she said. “He wanted to know how many people were going to buy our products on-line. He was skeptical that people would be so deliberate at such an emotional time. Would they shop around? Why would they use the Web to research their choices? Lots of questions like that.” She stopped for a moment. “I don't think he was satisfied. Phil stopped taking notes and started doodling long before Lenny was done,” she remembered.
This sounded more like the meetings I was familiar with.
“But Phil was the only skeptic,” Lenny said, “out of the whole group.”
I told him I doubted that. Most VCs require unanimity among partners before they move forward with a deal. They won't invest unless they all agree, or close to it. In these meetings, there's usually a proponent for each idea. Frank brought Lenny in, so he was probably playing the role of good cop. He made sure all the points in favor of the idea got presented, were understood, and were discussed. VCs want to run prospects through their paces, but it makes no sense to crucify them. So there's a good cop, and often some other partner will assume the role of bad cop to ask the hard questions and probe the issues that surfaced in earlier discussions among the partners. Sounds like Phil was the bad cop this morning. He may have been the one asking the tough questions, but he was probably speaking for all the partners, even Frank, in his skepticism.
“You may have been so busy presenting that you missed the signals,” I suggested to Lenny.
Lenny looked at me for a moment, miffed. “You had to be there,” he finally said.
And I wasn't. True enough.
“Phil was most worried,” Allison went on, “that if we pioneer the market, some big funeral chain, like my company, would see the opportunity and decide to compete with us. They have the size and money we don't have, and their network of local funeral homes is a big advantage.”