You’d think that as often as “VC is dead” is bandied about the Valley, we’d have seen a spoof video by now.
Yet here we are. Still investing in companies. Still evaluating new ideas. Still helping portfolio partners succeed. And occasionally – perhaps more frequently than many realize – we’re doing it damned well.
So while we’re here doing what we do, the more important question becomes: how do founders get the most out of us?
(Editor's note: Ethan will be speaking at Venture Shift on Thursday evening. Venture Shift is an evening event focused on the changing VC landscape. Ethan will be on the panel: Check it out here.)
Vet us as you would a C-level hire. Before inviting us to invest, Twilio’s Jeff Lawson had us interview with his co-founders, Evan Cooke and John Wolthius. His instructions to them: think of it as the most important hiring decision the company has to make. And we’d done our homework, developing a roadmap around developer-driven platforms for some time, so came prepared to nail the interview.
Jeff’s approach was dead on. Thinking of VCs as oversight police misses the core value of the VC-company partnership: working together to achieve the best outcome possible for everyone. The right partner grants access to the cumulative experience of dozens of experts at his or her firm: an invaluable ‘hire’ that will pay incredible dividends if worked right. At Bessemer, we’ve got 50 investment professionals that cross continents, generations and industries; you get the aggregate knowledge of a super team on your staff.
Make us earn our keep. When I make a new investment, my first thought is how I’ll help, and it is always part of our initial conversations so founders know what they’re getting behind the money. Inevitably, my own analysis of where I’ll help is incomplete; working actively with the team surfaces the most helpful avenues in the end.
But this process can be sped up…greatly. Just tell us. Immediately. Before the round is closed, even. At Bessemer, we’ve got a team of folks who know something about something, so put us to work. Among the other investors at Crowdflower, we joke about who’s the biggest closer when it comes to new sales leads (seriously! Ask Lukas who is winning). Since we’re constantly meeting new companies, we’re best able to intro companies looking for innovative tech solutions to real problems.
On-board us fast, and keep us up to speed. Like a new hire, we need to ramp. Help by opening the doors behind the idealized world of the board presentation. All hands, staff meetings, sales calls, show and tells, product reviews, hack days, happy hours – whatever best highlights the way things really happen, invite us along and help us dig in.
Get feisty; disagree! The stock purchase agreement doesn’t require constant agreement – or even any, really. Tell us when we don’t know what we’re talking about. We’re data nerds; if you don’t give feedback on the quality of our advice – or better yet its results – we can’t calibrate our thinking appropriately.
Tell it to us straight up. Trust me; we’re pretty good at giving it back.
See other articles about the changing VC landscape and the JOBS Act impact on Silicon Valley by other speakers attending Venture Shift.
Show and tell. We can’t help if we don’t know what’s happening. If you want to guarantee limited impact, keep us in the dark. The greater impact has always come in partnership with companies that share the most. Then I feel connected and see how to help move things forward without needing lots of real-time input or direct asks. This may be the only time oversharing can actually be the best philosophy.
So for the sensationalists out there, sorry. Death is still far.
Venture Capital is in fact evolving to a new model where the partnership runs two ways – and those that best exploit our linked survival are those who best thrive in the new environment. Most successful entrepreneurs take advantage of all freebies that come their way. So in that spirit, I say: come on, put us to work!
Ethan will be on the panel: Venture capitalists are dying. Long live VCs! After a decade of abysmal returns, many VC funds have closed up, and then a bunch of new funds have emerged. Who are they? What’s their value to entrepreneurs? Who will be the winners in the long run? On the panel are: Rick Marini (BranchOut), Trevor Kienzle (Correlation Ventures), Dave Whorton (Tugboat), Patrick Chung (NEA), Ethan Kurzweil (Bessemer Venture Partners), Moderator: Rich Melmon (Bullpen)
See below other articles about the venture landscape and how the JOBS Act will affect Silicon Valley by other speakers attending Venture Shift.
(Image source: glassdoor.com)