So VCs are seen by most founders these days as almost commodities. Folks with money that you get money from. And maybe that’s a good thing, in many ways.
I see fewer and fewer founders care if VCs make money, and the Go Go days of 2020 and 2021 are probably part of it. No one cared if they raised at 100x ARR. Everyone just wanted to be a unicorn. Even better if they could take millions out.
So be it, and I’d rather live in a world where VCs aren’t quite respected than one where they hold all the power, like when I started as a founder.
Still, there’s one scenario I just quietly wanted to address here. Because I think most — not all, but most — founders aren’t grateful to VCs in one specific scenario:
When the VC Puts Their Career at Risk for You — And Doesn’t Have To.
The first time this happened for me was with Talkdesk, my third venture investment. It’s now worth $10B and is an industry leader. But our Series A round hand some weird dynamics. The company was firing on all cylinders, but to make the deal work, I had to do a very, very large super pro-rata check. It wasn’t good for my career, and too much risk to take. But it made the deal happen. It worked out well for the company and the VC fund I worked at and all is good. But if it didn’t work out — game over for me at the time. Zero upside to me personally in sponsoring, advocating, and writing this outsized, large second check.
The second time was with another of my early investments now doing hundreds of millions in ARR. The first rounds were easy, but then they went through a tougher year (as most of us do). Not a truly bad year, just tougher. And the investors got spooked, and the company ran down to just a few months of cash. I met with the CEO and offered to put in $5m right there, on the spot, and I did. Which was a lot out of a tiny fund. I was the first investor in that round, even though I was already a large seed investor. It catalyzed the rest and the round finally did close. But — that was too much money for me, and too much risk. It had to work, or my career would have been at risk.
I’ve since done this 4-5 other times. One of them I’m getting burned on now, but all-in, 3 of them became unicorns.
Here’s the thing: for the most part, the founders have forgotten. Was it worth it? Would I do it over again, in several of these cases?
I’m just sharing one thing: a lot of VCs can be jerks, or at least, grating. A lot of them will just look at you like products. A lot will say stupid things.
But a few, well, a few VCs will risk their careers for you. For real.
It’s often not rational. It’s often because they deeply believe in you (not just the company), and want you to succeed. No matter what anyone else thinks. That’s how it’s been for me.
They probably won’t make a big deal about it. You probably won’t be able to tell unless you do the math on how much they are investing, and when.
But it’s something to be grateful for. And one of your superpowers as founders and as CEO is being grateful. It goes so, so far. And all it costs is just a little bit of time.
(Huge risk image from here)