I happen to think this is total crap: VCs will completely turn the screws on you when the economy tanks and behave in an adversarial and predatory fashion. When things are going better than expected, prices rise - and he doesn't like that he has to pay more. If you have revenues and cash flow, the fact of the matter is that you probably don't need VC and can walk away from stupid offers.

This is the usual nonsense about "smart investors" - he basically says outright that people should go with his firm despite other people offering a better concrete deal because of his intangible connections and expertise.

But the fact of the matter is that you CAN value those. If the choice is between getting $7M and $15M for the same chunk of your firm, you're basically paying a $8M premium for his potential assistance in selling the firm, lukewarm commitment towards raising future capital, and whatever value his rolodex has in your space divided by the amount of time he's actually going to spend on your startup. But that is absolutely crazy. You're getting maybe 15% of the VC's time and paying $8M for doing so. Seriously, that's nuts.

Instead, hire a decent investment banker and be prepared to pay several hundred thousand to do so, hire a couple great business development people who are actually in your space as opposed to in the venture capital space, and go to town. If your VC tells you that their halo effect is worth more than a million bucks, (or alternately if you're talking rather large numbers, if the delta between one money source and another is more than say 20%) you need some pretty concrete reasons as to why.

TLDR: Shop around for capital. Fred probably is worth a premium - but not a 2x premium. Cash flow wins and VC puffery doesn't.