![]() ![]() Ultimately, the runway ran out and the companies that all had been very viable and profitable prior to the VC showing up ran out of money and thousands of people had to be let go.Ultimately, the VCs primary responsibility is to their investors NOT to the company and its employees. Instead the VCs insisted the company spend money to get bigger against the wishes of the majority of founders who wanted to conserve the cash. The new company itself was a decent organization and would have done fine if it just hunkered down and weathered the storm. So they pushed and pushed to get the new company to a stage where it could IPO. The lead VC was eager to show a success as their stable of companies at the time was not doing so well (2001 tech meltdown). A group of VCs came in and helped merge us with several other companies. When they are not on the same page, I would tend to trust the founder far more often than the VCs.A good point would be a company that I was a founder of not too long ago. When the VC and the founders are on the same page, companies crank. Though there are times when the founder is definitely a problem, my feeling is the founder’s interests more often align with what’s best for the company than how the VC’s interests align. I have seen countless deals where the VC contingent pushes their own interests over what is best for the company. You ignore the elephant in your particular room – what is best for the VC is not always what is best for the company. You must try to make the right decisions for what is best for the Company and if that means being labeled unfriendly to founders, so be it. That sucks for me but I don’t regret anything I did or said in the events that were described in that book. I have heard from quite a few founders that they read the book Hatching Twitter and came away thinking that they would not want to work with me. If you do that well, you will get a lot right but never everything right. You have to figure things out all the time based on facts and circumstances, based on a combination of experience and knowledge. There is no one way to do things and no single truth. Orthodoxy in thinking and believing is quite troublesome. It is often so, but certainly not always so. ![]() I reject the notion that being led by its founder is always what is best for a Company. They are the bodies made up of reasonable people who can and should debate these issues and find resolution and make the hard decisions. Of course, reasonable people will disagree about what is best for a Company. It has to be that way and, many times, when it is all over and done, the founder realized it was in fact best for them too. I’ve been there many times and my mantra in those moments is “what is best for the Company?”. This creates a conflict situation and VCs are often caught in the middle of it. Entrepreneurs are a very special breed of people.īut there are times when interests diverge and what is best for the Company and it’s stakeholders may not be what an entrepreneur perceives to be in their own best interest. Having worked with entrepreneurs for over thirty years now, I have developed tremendous admiration for what they do and for the Companies they create. Being “founder friendly” is an important way to do that.īut there is another important participant in the VC/entrepreneur relationship and that is the Company the entrepreneur creates and all of its stakeholders the employees, the customers, the suppliers, and even the community around the Company. The VC industry is highly competitive for the best opportunities and we certainly do try to ingratiate ourselves and our firms to the entrepreneurs who will decide who gets to invest in their companies and who does not. It is an interesting observation and was worthy of a reply. Long time VC watcher, writer, and analyst Dan Primack suggested on Friday that the days of VCs trying to out “founder friendly” each other are now over. ![]()
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