I got off the conference call tonight and we scheduled another for two days from now. The lead VC remained excited and was proceeding, meetings were being completed, documents were arriving at the venture firm's server. But the startup's market was already heating up. A major magazine recently featured it in a cover story. Launch time for the startup was still on schedule, for early next year. Cash burn was as expected. No surprises so far. But the money was still not in the bank, after nearly six months of pursuit.
That's how it happens. The optimistic founders (and the experienced people, including me) initially talk about a round of VC money being in the bank in a couple of months. But in reality it takes longer, much longer than that. Chalk it up to the nature of the entrepreneur. It seems to always be that way. The exception of course is during what Charles Kindleberger dubbed the Mania Phase of the boom-to-bust cycle (when all realism is thrown to the wind as money in large quantities becomes virtually free to any and all comers).
So what should one do about this frustrating situation? I have taken this course of action: Remain optimistic, but apply The Rule of 2. Multiply by 2 the time you expect to require to get your money. Remain confident. Work hard to finish the round. Assume you will need twice as long to get the money. That seems to be the best estimate of when the cash will arrive in the bank.
BOTTOM LINE: The money takes a lot longer to get than you think it will. So plan on it. Figure three months become six. And get ready for lots of surprises, snags, and hindrances as you proceed to find the cash. Apply the rule of two and then time will not be working against you.