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October 6, 2009

Guest blog post by Amit Kumar, Founder & CEO, Palaran:

Over the last few months, we met with a lot of potential investors – friends and family, mentors and ex-bosses, institutional angels and, yes, VCs of all hue. A strong team, a robust idea, and an actual business model meant we got a good hearing – and a good shake too. Then came the time to make a decision – who should we partner with to turn our vision into reality?

Today, I’m happy to announce we’ve closed our first round of funding with True Ventures. We’re honored to join their portfolio companies like Automattic (think WordPress), gdgt, GigaOM, Brightroll, and Bloomspot (full list here).

So, how did we make this momentous decision? Here’s what we looked for, and found with True. We thought we’d post the list in case it helps other entrepreneurs, too!

* Respect: Are the VCs ‘pitching’ themselves, as much as listening to your own ‘pitch’? If not, there’s a power relationship here that doesn’t augur well.
* Speed: How quickly do the VCs move? True got back to us in less than 1 working day – now that’s quick (and probably an outlier) – but you get the idea.
* Trust: Does the VC inspire trust? Do you feel they will back you as a founder through thick and thin?
* Openness: Dealmaking is tricky, and things will be touch-and-go at times – do your potential partners listen well? Are they upfront?
* Pragmatism: Early-stage startups are hard work indeed. Will your VCs be pragmatic about when to intervene, when to help, and when to merely observe?
* Experience: Different firms have different strengths – we appreciate True’s deep bench of Entrepreneur-turned-partners – but you might have a different perspective.
* Reputation: Early stage VC firms don’t have a long historical record, but there are clear trends and experiences you can extrapolate from.
* Personal Rapport: Yes, it’s intangible, but it’s critical nevertheless! And, it’s the key to any successful long-term relationship. As they say, choose your partner wisely! ;-)

This is, of course, just the start of the Palaran journey. We’re glad to have great partners, and a solid team to execute on our vision – stay tuned for more! (no, Joseph, it’s not time for us to share yet!)

- Amit