VC-Founder relationship status: Addressing concerns.
This is true in every relationship: It’s difficult to perfectly express something that we believe is wrong and should be seriously taken into account by the person(s) involved. It’s even more difficult to act towards the right pace of change.
It requires a fair dose of intelligibility, tangibility and adaptability in order to pass the right messages at the right times to someone but also patience, resilience and tolerance to really help people solves their issues.
In my VC-Founder relationships, every time I have witnessed obvious mistakes or detected low-level signals that could later be the cause of more or less impactful consequences, I have asked myself how I could trigger or enable the right problem-solving process. And I must admit that I have been tired of my mediocre-self in those situations lately where I have pointed out the right issues but only partially or without the degree of excellence that I would have required from a founder.
After giving it some thought, I’ve come up with a simple framework to better address any given issues with founders and their companies.
First, is my assessment based on facts or impressions? If it’s based on facts, are those facts true and relevant or misguiding for some reasons? If it’s based on impressions, is it just a temporary/unusual state that can be explained or are there symptomatic situations or behaviours that are persistants.
A great team member leaving the company is a fact. Detecting a misplaced ego or a defiant attitude is an impression. For the latter, as we tend to forget explicit examples, it’s important to log the words and actions that demonstrate the clear signs of this behaviour in order to relate to them later on when discussing with the person(s) involved.
Second, what are the reasons for those facts or behaviours? If we don’t understand the roots of a problem, we can’t really succeed in finding the right resolution principles. This process of understanding should partly be conducted with the involved parties.
For instance, a CEO losing his temper with his product team or letting his marketing team deliver a mediocre work is a symptom of misunderstanding and lack of proper engagement with his/her people. Nothing more, nothing less. Therefore we should work on her understanding and engagement towards those subjects. From there will come a better involvement.
Third, how to deliver the message? The way people receive and process information vary, and how we maximize the receptiveness of a message matters as much as the message itself. Face to face meetings, phone calls, casual get together or formal meeting, adaptation to the recipient is key.
With highly emotional, ego-driven people for instance, attention to the form is crucial.
Fourth, how to follow-up accordingly? Nothing happen overnight… It takes more or less time to drive change or progress in a company. We should not insist on pointing out problems or simply checking how things progress but rather follow the state of any given subject like a roadmap with the different interactions and actions that have taken place. It’s the only way to clearly see how things are really moving. Time and Actions should always be correlated when measuring change and progress.
It took me some time to come up with this set of simple rules that I really hope will help me shape the way I will share my thoughts when it comes to address apparent issues with the founders of our portfolio companies like Zenly, Sourced, Ibanfirst, Side, Payfit, Forest, Dice or Doctrine.
People are invariable and complex. Relationships require positive honesty and attention in order to work on the long term and it’s the investor’s responsibility to nurture that dynamic with the founders of his/her portfolio companies.