One of the most BS statements about VCs: VCs do not add value to companies pre product-market-fit. RUBBISH. They can hone ICPs, advise on messaging, channel selection, content creation, pricing. I have seen countless VCs move the needle in helping companies find PMF. #founder #funding #business #investing #vc #venturecapital #entrepreneur #startup
🤔 That'd be like an investor in a soccer team telling a young player that he can "hone your goal scoring instincts, advise on dribbling skills, when not to commit to tackles and tweak your positional awareness" Like dissecting a frog to understand its anatomy; you might gain insight into the inner workings of ICPs, messaging, channel selection, content creation, and pricing, but ultimately, like the frog, your company will end up dead. To founders - count their money, not on the VC.
Ideally an investor should have deep operating experience. Many VCs today have no long-term, practical experience themselves. A lot of founders I speak to complain about this privately, but candidly would never say it openly as they wouldn't want to rule out any term sheet (even if ultimately they turned it down). Above all what I hear is the most important value add is practical connections into potential buyers/markets.
Bias. It's your sample that is rubbish. Easier to claim VC value when a startup succeeds (<10%) and gets on the venture radar with millions ARR. Go ask a typical group of founders instead of your cherry picked unicorns and see how much VC really helped. Or even acknowledged them. For the most part it's like saying the horse track bettors looked at the numbers and assisted the horse, jockey and trainer to win the race.
Big difference between regions but in general most of them don’t add value, with some great exceptions of VC’s that made a huge difference. I asked > 1.200 founders
Clients & partners, clients & partners, clients & partners. Its all we do (aside from capital) and we do it very well
Harry Stebbings VC is like everything else. Always come down to the people not the capital. Great investors can add value at at any stage. I’ve got a few on my cap table now that have been a real value add in early introductions and just as great listeners - sometimes that’s all a founder needs pre PFM.
yes the good ones can - what % are good ?
This reminds me of a conversation I had with an associate friend who said he brought in 7 startups to his firm. So I asked what are you doing to make those 7 successful? (Are you an investor who is a treasure hunter VS a unicorn builder?)
VC's can do anything. Just like any founder is possible of anything. It's just not likely.
CEO at Cerhum | MedTech & HealthTech | Patient-specific biomaterial bone grafts | CMF surgery
5moHarry on the principle yes, but early stage = smaller tickets = number game strategy = less bandwidth to dive deep at each portfolio co level to be able to really make a difference imho, hence it appears to be less systematic, less reliable - less part of the model