Pick, nurture and exit
Venture celebrates investors who can pick founders and companies. Picking requires access. Access is a function of many things including 1) brand 2) reputation 3) capital 4) network 5) expertise and 6) tenacity. You don't need all at once but you do need some combination of them. Do well and you're a great picker.
It also celebrates investors for their help during the journey, be it with advice, fundraising, customer introductions, hiring etc. Hashtag value add. Some are qualified to do a few of those, some are not. Regardless, given the nurture part is the longest, investors feel compelled to #add #value because "we're more than just capital." Do well and you're a great sparring partner1 and a worthy name on the cap table.
Exits. Oh exits. This is where investors spend the least time, in my opinion. After all, isn't it your job to 1) source and 2) manage portfolio companies? Sort of. LPs give you money to return money. Like actual money. I saw conversations on exit happen at the board level when 1) the fund was nearing the end of term or 2) things were not going so well and fundraising was not a viable option. In both instances, exit discussions were 'forced' and reactive. If the rest of the job is cool, this part is not. It's uncomfortable, full of friction, and frankly, many just don't have the experience / expertise, even if the industry is a bunch of ex investment bankers 😉 More in the next post...
I loathe when people describe themselves as a sparring partner for founders. Don't know why.↩