A startup CEO says the majority of VCs are talking 'complete hogwash' if they say they can offer more than money

Sam Shead

May 17, 2016, 19:17 IST

Piglets are seen at a farm on the outskirts of Baokang, in central China's Hubei province, September 12, 2007.The retail price of pork in China, the country's staple meat, soared 77.6 percent in August from the same month a year ago, though it began to decline in the middle of the month, according to the National Development and Reform Commission, Xinhua News Agency reported.

Venture capital (VC) firms will go to great lengths to convince the most promising tech founders to accept their deals so they can get their hands on that all-important slice of equity.

Some of them will offer introductions to important people in their network, while others will offer hardcore engineering support and a cool place to work. The very best advice, swanky dinners, and even the odd CEO retreat are also up for grabs if you sign a term sheet with us, they might say.

But Vineet Jain, CEO and cofounder of cloud storage firm Egnyte, which has raised $62 million (£43 million), believes many VCs overpromise.

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Speaking to Business Insider by phone on Tuesday, Jain said: "Most VC firms say we give you more than money. That's complete hogwash."

Egnyte, which competes with Box and Dropbox, has been backed by Google Ventures, the venture capital arm of Google, and Kleiner Perkins, a well-known Silicon Valley investor with billions at its disposal.

Jain, whose company is based over the road from Google in Mountain View, was quick to say that Google Ventures is unlike many other venture capital companies. "They were instrumental to us," he said, adding that the firm helped Egnyte to improve its web user interface and assisted with the company's marketing efforts.

Egnyte has also integrated its cloud storage platform - used by 15,000 companies - with Google's own cloud platform, Google Drive.

Unlike Box and Dropbox, who have raised $558 million (£385 million) and $1.1 billion (£760 million) respectively, Egnyte is on target to be cash flow positive by the third quarter of this year.

"I refused to have a free version of Egnyte," said Jain. "Look at where I am today."