My Advice for Venture Capitalists

I spoke with OpenView Ventures for their Founder’s Corner podcast that was released today, and you can find a full transcript here. One question I was especially eager to answer way, “What advice do you have for VCs?”

Jonathan: I’ll bite. What about VCs? Do you have a couple pieces of advice for them?

Danielle: Yeah. I would just say, err on the side of very clear communication. I think there’s a lot of times when I see deals go badly because the founder feels like they’re getting screwed and I don’t think that’s what VCs mean to do.

But founders, they feel the sense that they don’t know what’s going on, but they can’t put their finger on it. And unfortunately, I think sometimes, it leads to things not working out that could have been really great.

I think founders don’t understand how a term sheet works. Founders don’t really understand cap tables. Founders don’t understand dilution. Founders don’t know how to talk to their employees about the stock options that they have.

There are a lot of opportunities to help founders feel like they’re on a level playing field in terms of information. And I think that VCs, having been around longer, these funds are living for 10, 20 years. These VCs have been in the business.

And so, there’s just a huge opportunity to build the trust the good old-fashioned way. Like, when VCs say “How can I help?” I’m like “You already know how you can help. Just do it. Just do these basic things.” And I think the most successful investors I’ve talked to, that’s pretty much why they’re winning, is because founders love them for just being so genuine.

And generally, I have a really good impression of the industry. In fact, it’s even better than when I started. I think there are so many people that are working so hard to make it awesome. And I think things would just move a lot faster for everyone if things were more widely understood on both sides.