Q: What is your stance regarding watermarks on presentations?  I'm thinking something subtle, transparent text diagonally across the face of the slides that says, Prepared for Foundry-Do Not Distribute.  Do VCs feel offended that an entrepreneur takes that step or is this pretty typical especially for first communications?  And finally, does this even accomplish anything or will a VC still share a presentation with a possible competitor in their portfolio or maybe soon to be in their portfolio?

A: (Brad): I don't think I can answer this one generically, but I can answer it personally.  I would never be offended by a watermark like this and I would respect it.  When I see something that could be construed as competitive with a company in my portfolio, I generally mention this to the entrepreneur approaching me right away and give them control over whether or not they want to send me any other information.  I don't keep any email or presentations so the half life of this in my "data store" is typically very short.

I know plenty of VCs that behave the way I do and plenty that don't.  My best advice for entrepreneurs that are concerned about this is to do their research in advance and only approach VCs that you think are relevant for what you are doing, have a reputation for fair dealing, and are transparent about their portfolios. 

Also - remember that it's rarely the idea that matters - it's the execution of the idea.  So - even if your presentation gets passed by a VC you approach to a potential competitor that is in their portfolio, it probably doesn't matter much beyond the notion that a potential competitor is now aware of what you are thinking about.  You will still have to execute - as will they - to be successful.