Venture Capitalists – Choose the right VC
David Mandell – Venture Capitalists – Your team matters. Tips on partnering with the right VCs.
So, you know when it comes to looking for a VC as a startup entrepreneur, I think it’s interesting to think about the way you approach that relationship, a lot of people look for a big name or a brand name because everybody knows them and they’re all set if they get in their portfolio… and the reality is, the way to think about looking for a VC is to think about having a co-founder. The team matters more than anything else.This is someone you’re going to be working with daily as you try and build your business. You need to feel that they are adding as much value to your company as another co-founder would because that’s how closely you’re working with them.
I see a lot of people run to the money and they think more money is better, than they realize money is not what matters, partnership is really what matters and getting the right partner and the right VC behind you, a VC who understands you, whose personalities mix, understands the team and what they’re trying to accomplish, understands the market, has the right connections for you that can really help you build your business, it’s a lot more important than getting a brand name.
If you’re not incredibly important to a brand name you’re irrelevant, right? And getting money from a big VC and not being important to them on the portfolio side is really frustrating because you’re not going to get any of their attention, and understanding that you’re going to have to work with that VC is also critical because the way I like to talk about it is, when the company’s doing well, the VC works with the company, when the company’s going sideways, you work for the VC.
An you’ve got to understand that that relationship is really important, if they don’t respect you as a team and your goals and your philosophy and where you’re trying to get to, you become irrelevant very quickly to a VC because at some point it’s just about getting a return on their money so understanding that, who you’re working with, from a personality and team perspective is much more important than the name of the firm with the amount of money you’re raising.
I think again, that’s something new start up entrepreneurs don’t understand because of the hype, it’s all about who gets this VC, how much money did they raise, and what was the evaluation, they don’t realize that what they need is someone that is able to get in the trenches with you, help you build a business and work through the hard parts and not let ego get in the way and understand how do we work together and build this business and make it successful even when it’s not that comfortable, because you’re going to have to have a lot of conversations with your VC that are not that comfortable.