The  V  Formation

The V Formation: Ramblings on enterprise product, startups, and investing

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There is a profound intimacy that early stage investors develop with founders, and it stems from long days and late nights spent in the gritty business of company building.

Some months into joining venture capital at Mayfield, I had coffee with a friend who asked me a question I’d heard more than once up to that point. The conversation went something like this:

”So, done any deals yet?”

“Nope. I’ve actually been spending a bunch of time helping our portfolio companies with whatever they need, like product strategy, marketing, pricing, and hiring.”

“Ah got it, so they can be a deal source or reference for new deals you’re trying to win?”

“Well, not really. I'm doing it to help our companies succeed."

I am now just over a year into my venture capital career, and I have now indeed done some deals. But I have come to realize that I am not here just to do deals. I am here to help build companies. I am here to be a servant investor.

Perhaps that terms sounds familiar. Any product manager worth their salt knows the concept of servant leadership. As a PM, you are only as good as your ability to influence others, and that is accomplished by working hard to gather data, bringing the right people together, pointing out potential landmines, and--most importantly--listening carefully and staying humble. This is because PMs have no official power. VCs may have official power, but ultimately they should do the same thing.

Industry giant Vinod Khosla infamously stated that 70-80% of VCs provide negative value. There is some truth here. Bad VCs give boardroom proclamations based on ivory tower theorycrafting. Bad VCs attempt to run the founders’ businesses themselves. Good VCs are like good product leaders: they are constantly gathering data about how the world is evolving, they listen carefully to their founders’ issues, and then they do whatever work is needed for the company to succeed. Good VCs are servant investors, bringing the right combination of experience, openness, humility, and hard work to help their founders succeed.

Good VCs are the Alfred to the founder’s Batman, using experience and values as a guide while quietly working in the background to get things done. Alfred was instrumental in shaping young Bruce Wayne's early journey into a hero, both in terms of instilling values and providing support. Also, Alfred was quite the badass-- a former British special operations soldier in fact, in some incarnations. While I’m not saying I’m that kind of “operator,” I certainly do use my past enterprise and startup experience to point out to founders where the landmines are in the journey.

One important part to clarify: being a servant investor doesn’t mean being a doormat. Ultimately, investor and entrepreneur should be together on a journey towards building a successful business. There are times when an investor has to have tough conversations with founders about business and about themselves. But there’s a right way to do this that combines honesty and transparency with a distinct lack of hostility. There were many times when Alfred gently but firmly held the mirror up to Batman to show when he had gone too far astray from his professed mission and values. A servant investor initiates tough conversations, and knows how to do so with dignity and respect.

It's not just me who practices the servant investor ethos. In the past year, I’ve seen the countless hours our team spends to help build our portfolio companies outside the boardroom. In that time I have also sweated alongside several of our founders on a variety of areas, including:
  • Iterating on the product strategy and roadmap for cloud-native infrastructure
  • Revising the go-to-market and sales collateral for an edge cloud service
  • Working through pricing and the funnel for a SaaS data sharing platform
  • Advising on the tech stack for a SaaS low code app and a data-oriented hardware manufacturer
  • Finding and evaluating senior product, marketing, and engineering talent for--well, every company is dealing with this issue nowadays...
I came into this business with the preconceived notion that venture investors spend most of their time sourcing new deals. To be fair, finding companies to invest in is indeed a significant component of the job. But what I’ve come to believe is that good VCs invest in relationships, not in transactions, and ultimately spend their time helping their founders to be successful.

I’ve shared in our founders’ hopes, dreams, and fears. I’ve seen them grow, and I’ve continued to grow alongside them in turn. I am here to be a servant investor and help build companies. I am here to invest in relationships, not transactions.This may not help me source or win more deals, but it will hopefully help our founders to succeed. And for me, that is enough.

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