Dam Venture
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Dam Venture

The Unwritten Rules of Venture Capital

Low effort meme for a low effort baseball reference.

Let me start this off by saying, I hate baseball analogies. In my Medium drafts I literally have a 700-word rant on why baseball + other mediocre sports analogies are hurting our industry. Today, unfortunately, and much to my chagrin, I’ve found the use for my enemy. And that is with the concept of unwritten rules.

See, baseball has a lot of unwritten rules. Pitchers don’t field pop-ups. You don’t steal bases when you have a big lead. Don’t bunt during a no-hitter. Very possible if you’re not a baseball fan that those mean nothing to you. Venture capital though, similarly, has unwritten rules. None of these are going to get you fired if you break one, but they’re unspoken that as an industry we’ve come to recognize, and that elicit a “bro, tf?” when someone breaks it.

There are little things like always using a coaster (regardless of what you’re drinking) or making sure that you never take the last bite of food, or even something like making sure you’re neither the best dressed (nor worst dressed) at any given event. All these trends could be their own article, but I’ve recently noticed a couple of other important trends in “unwritten rules” that I thought would be helpful to discuss today.

FrieNDAs Not NDAs

The frieNDA is the unspoken pinky promise that VCs have between each other to never tell the wrong people gossip. VC is a gossipy industry. I’ve often described it as high school with billions of dollars. But as a VC, you have to know who to tell information to, when to tell it, or if something you hear is a secret that will get taken to the grave. You need to gossip, but you don’t want to betray anyone, or create awkward situations. VCs rarely sign NDAs. When I worked in deep tech VC, it was an automatic pass if someone wanted an NDA before sharing basic information about a company. Rule of thumb was that if I could tell a competitor enough about your product to replicate it from a 30-minute call that it wouldn’t be interesting to invest in. However, like NDAs are sacred for actors, big tech, and anyone over the age of 55, the frieNDA is equally sacred for VC. FrieNDAs form the foundation of your reputation, and your reliability. Venture capital is a relationship business, and the frieNDA is the defined representation of trust. If people can’t trust you, they won’t pass you deals, they won’t coinvest, and founders won’t want to take your capital.

It’s Not Just “Yes”, it’s “Yes, and?”

Like it or not, in many ways venture capital is just a glorified sales job. And as a salesperson, it’s always your job to say yes to anything that would make a sale. Anything from ice climbing, tea at 1AM in Singapore, or another round of tequila shots, it’s your job to make genuine connections and to spend time with people. This usually means doing some things that seem crazy. And when you hit that line of crazy, that’s when the “yes, and?” kicks in. You don’t want to just be at the party, you want to be the life of the party. You’re not just drinking the tequila shots, you’re pouring them, and ordering another bottle. When you become a VC, you become a yes man (pardon my use of a gendered term). The best VCs are “yes, and?” men.

Don’t Bite the Hand that Feeds You

If someone passes you a deal, you don’t turn around and cram them out. That simple. Seems easy, but you’d be shocked how many times that gets violated. It’s happened to me, it’s happened to most of my friends, and it’s the easiest way to lose someone’s trust forever (that isn’t, of course, a breach of a frieNDA).

And on that happy note, I’ll sign off. Until next time!



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Andrew Chan

Senior Associate at Builders VC (https://www.builders.vc/) obsessed with transforming pen and paper industries through advanced technology.