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Are investors really offering anything more than money, and, occasionally, experience?

• gumby 4y ago
  Connections. Depending on your business this can be for key customers (enterprise businesses), some key hires (still do your own interviewing -- the introductions are just that, introductions). Also some pattern matching ("hey, you aren't noticing this trend in sales, which has killed a couple of my prior portfolio companies". It could be that you're different and that issue doesn't apply to you; it could more likely be that you got some advice that saved you from an untimely death). These can be valuable. But I've had boards with experienced VCs who were not engaged, were usefully engaged, or were time-wastingly engaged. And sometimes the same person can be all three at different times, depending on mood and how busy they are. I had a company killed by famous but it turned out bad VC (the only time I've seen another VC call one a shithead in a board meeting). I also had a VC save a company that was struggling. Avoid the arrogant ones if you can. Sadly they are the largest percentage. They don't call their customers customers; they call them LPs (which legally they are, but I don't call my car a "horseless carriage" though it is one). I remember being at a party where $FAMOUS_VC was talking about all the jobs "he" had created and factories in the USA that "he" had built... by which he actually meant he had funded some companies that did those things. In short: the more experience you have the more important cash is vs advice, yet ironically the more experience you have the more value you get out of that advice!
  • formerkrogemp 4y ago
    Thank you for taking the time to share your experience and perspective.