VCs and Community—Why Firms Are Getting Left Behind, and How To Fix It
“The fastest way to change yourself is to hang out with people who are already the way you want to be.” -Reid Hoffman
Future and current entrepreneurs tackle diverse issues, seek mentorship, and strive for growth while competing in stressful and trying situations. Whom better to turn to for support and friendship than fellow entrepreneurs who have been in, or currently are in, similar uphill battles? VCs must think outside of the box, put themselves in the shoes of these change-makers, and appeal to their need for a strong, lasting community.
Community hasn’t taken a backseat — but VCs are being left behind
Go to any tech event that is centered around getting funded, finding a co-founder, initial hiring, or pitching, and you’ll see a room that looks almost the same wherever you are — white guys in ties. The mood is awkward and tense, unless you’re an expert networker, which a lot of first-time entrepreneurs are not. There’s usually a panel of experts, some of whom work for firms we look up to, and the conversation revolves around their lives and experiences, with some Q&A from what feels like an audience rather than a participatory body. You walk around, bumbling about your product and hoping you sound professional, while drinking a beer out of a kitchen keg. After a few hours, you go home with several business cards and never follow up.
Where is everyone else? Where are the real, in-depth, conversations happening? They haven’t disappeared. They’re not in hiding. They’re just simply not being owned by area VCs. Productive and meaningful community conversations need to meet people where they are — not only in terms of location, but personality, character, mood, and comfort as well.
Entrepreneurs are people who want to connect with one another — more often than not, they’re young people who want to feel comfortable, casual, and empowered. A strong community will allow them to be themselves, not hide behind a suit, or worse — not participate at all because they feel like they don’t belong. It will give them constant opportunities for mentorship, training, relationship development, networking, and growth. It will not put them into a box, but rather, allow them to thrive on their own terms.
What can VCs do to build their communities in a meaningful and lasting way?
Create the right image
Your image brings folks in or turns them away. It is everything from the way you present yourself on social networks, whom you add to your portfolio, your reputation as an investor or board member, to the types of events you host. Entrepreneurs have a keen sense of this image, and use it to inform how they interact with your firm and network.
Both online and off—folks must feel comfortable being themselves. This is good for both the entrepreneur and the investor. Seeing entrepreneurs unrehearsed and out of uniform gives investors the opportunity to get to know these folks as they really are, and speak to them at eye level. Having a casual space where entrepreneurs can interact with one another and create lasting relationships builds trust with the firm, and invites diverse groups to interact with it.
Such an environment is ripe for networking and building connections, and can help with entrepreneurial pain points such as hiring, assessing the value of a deal, finding brand evangelists, and creating partnerships with other companies. This type of community can move deal flow forward, being a great asset to potential entrepreneurs vying to be in the portfolio.
Take the focus off booze and bros
According to Fortune, fewer than 6% of all decision-makers at U.S. venture capital firms are women. If the 94% of VC decision makers are the ones who co-ordinate community events for their firm, that makes for a fairly homogenous environment. VCs need to look through a gendered lens while considering their event and program strategy.
I’ve gotten countless tech event invites that focus on alcohol as a social lubricant and a way to get tech folks in the door—everything from beer gardens to scotch tastings. While some groups may find those events attractive (guess who), others like myself get turned away. I don’t drink scotch, and I’m not going to go to your event, even though the speaker looked great and I was excited to meet folks on the RSVP list.
Look at the theme and copy around your event and ask yourself — who might feel out of place here? Could some entrepreneurs feel excluded? Am I missing out on opportunities to meet the next brilliant entrepreneurs? That answer is likely yes.
Exclusivity is important
While events for the general startup and tech crowd are good ways to create deal flow, recruit folks to your portfolio’s teams, and assess what may be the new unicorn, having a thriving community exclusively for your existing portfolio companies will give them the tools they need for success.
Exclusive communities provide privacy, mentorship, support for founders and their teammates, and boost confidence in their members. They offer new opportunities—partnerships, exclusive training summits, and networking that can strengthen a company’s future hiring push.
Create a safe space
Just because you have a few companies in your portfolio does not make them a community. These founders (and their teammates) need a place to be present, talk to one another, and feel connected. They need to know the rules of the Community, what is expected of them, and how to behave, establishing a safe space right off the bat—engrained into the structure of the Community.
This online space should be simple, organized, and casual. Some firms, such as Union Square Ventures and Y Combinator, have created excellent online communities on forums and Slack, allowing portfolio companies to access troves of information, real-time mentorships, and training sessions instantly. Many of the relationships formed through these communities stick around for years.
In this space, members will be able to communicate with one another, organize around a firm’s events, get answers and advice from folks they’ll get to know as trustworthy, and share a connection—your firm. With a dedicated Program Manager, your community (exclusive and inclusive) will grow and help future portfolio companies get stronger and more diverse. Your reputation as a supportive firm that is proactive and cares about portfolio companies’ success will sharpen. Most importantly—you will be contributing to the knowledge, co-operation, and growth of entrepreneurs poised to change the way we see the world.
Questions? Comments? Ideas? Email me at email@example.com. Let’s talk startups.