June 26, 2009
I’d like to propose that “entrepreneur friendly VC” is code for “suckup VC,” and “hardass VC” is code for “d*ck VC,” and that you should avoid both. Here’s why.
I just retweeted a Twitter post which stated:
Avoid “entrepreneur friendly” VCs, instead choose “hardass, potentially will fire you, but WILL make your company successful” VCs.
I promptly got a reply from @Joshu saying:
Problem is, “entrepreneur friendly” is code for “tries not to be a dick,” you know the stories.
This was really timely for me, as it echoed conversations I have had a number of times over the past few weeks.
In one of these conversations, an entrepreneur I was in serious discussions with told me he that one of my portfolio entrepreneurs called me his toughest board member. And, the entrepreneur who I was in discussions with said he was attracted to that because he felt his current board, while comfortable, did not push him enough and he wanted a board that would force him to be better rather than suckup to him.
In another conversation, someone I know told me their VC board member was “a total d*ck.”
And just last night I had a great conversation with yet another entrepreneur, one who I currently work with, who honestly told me sometimes I could be pushy, and that occasionally annoyed him (especially when it was something I was a broken record on), but that overall he appreciated that I took stands and was willing to challenge him.
Which leads me to suggest to entrepreneurs that they pick their VC neither on the basis of being “entrepreneur friendly” nor “hardass.” I think there are two fundamental questions to ask: will the VC be a good partner in good times and bad; and what are the tangible ways he or she will help me build my business?
Being a good partner means alot of different things, but it certainly includes challenging the entrepreneur in some instances and supporting them in others. Everyone has different styles, but I think the important thing is to develop a meangingful, trust-based relationship with entrepreneurs, so that when you support them they put weight on the fact you are supportive; and, on the other hand, they will take note and give serious consideration when you disagree with them. A good VC board member should work hard to support the entrepreneur any way he/she can, and, no question, it helps to have a good chemistry with an entrepreneur. But by the same token the measure of a board member’s success is not whether the entrepreneur considers him a pal. Supportive is one thing; suckup or yes man is another.
On the other hand, being willing to take a stand is a far cry from being a “hardass.” There are VCs out there with amazing track records who are known for being hardasses, and plenty of entrepreneurs are willing to endure the hardass because they think it is worth the value they will get. That is a rational tradeoff, but it is not to say that the VC is valuable because he is a hardass. If you check around, trust me, you will find entrepreneurs who believe they have gotten tons of value from their VC, but did not have to put up with a hardass board member.
So, my advice is, try to find the VC who can be a great partner without being a suckup, and can add lots of value without being a hardass.