There is only one way to deal with your Elephants – head on. Don’t pretend it isn’t in the room. Know in advance what you’re going to say and don’t wait for the VC to bring it up. When VC’s bring up Elephants they feel like they’re “catching you out” and you’ve lost the high ground. When you bring them up you take the issue off the table. I can’t say that they’ll get over the issue, but they won’t hold it against you for not bringing it up.