VC Services: Game Over
Depending from which side you’re looking into this, Investors/VCs saying they provide smart/useful support and advisory to their portfolio companies is often either a lie (from the VC perspective of course) or an illusion (from the entrepreneur perspective).
Most investors are failing to provide the right support and advisory to their portfolio companies. And I’m including us, Kima Ventures.
WE WANT TO FIX THIS.
But first, as investors tend to get sucked up within their own agenda, it’s important to take a step-back and face the truth about the whole entrepreneurs-investors relationship.
RULE #1: The dessert comes after
I am a business angel, I add a lot of value on the table in terms of advisory and network, you need to give me better terms if you want me to invest.
NO WAY !
Money buys shares. Upfront & always
Support buys options. Afterwards & maybe
You should never give a discretionary discount on a deal to someone because he/she tells you that she/he’s putting more value on the table than others. First, you don’t know that yet. Second, if that is the case, then put together a stock option plan from 0.2% to 0.8% depending on the value brought on the table. here is an example. It must remain discretionary, so add a 12 months period cliff (to back off in case) and another 12 months period vesting.
RULE #2: Investors ask. Entrepreneurs act.
I think you should hire a CFO. I think you’re not managing your growth. I think you should add this feature… I think…
EXCUSE ME ?
Investors ask. Hopefully
Entrepreneurs act. Or not
As time passes, a founder will always know his/her market, his/her business, his/her people and his/her customers better than anyone else. Hopefully. So the investor’s job is to provide a clear and constructive opinion of course but mainly to ask simple and stupid questions and hope for smart answers and a bold execution. If you think, as an investor, that too often you’re smarter than the entrepreneurs you fund, well they probably suck (and by extension you suck too…)
RULE #3: Investors must be enablers
I don’t have time for a meeting this week, to write a post, to interconnect my network, to provide more support to our entrepreneurs…
DEAL WITH YOUR AGENDA !
Entrepreneurs push over the edge. We hope :)
What about their VCs & investors… Well they often lack consistency.
Besides money, Every single entrepreneur needs access to simple/smart advisory, ressources (perks, templates…) and an actionnable network they can rely on. Nothing more, nothing less. It is as simple as that.
Kima Ventures has 350 companies in its portfolio. And 4 people. We see about 1,000 new ones per week and invest in 2 of them, every single week. Seed and Series A round, mainly in EU/US. From $100K to $300K. More or Less.
Can we provide a centralized support to all those companies? No. Is there a solution? I think so.
We’re now building our in-house platform to address our entrepreneurs and provide them with the support they deserve:
- We’re changing our onboarding process for the new startups joining our portfolio. The goal is to build a sense of proximity, to explain clearly who we are, what we expect and provide, to share fundamental/basic lessons that we often forget to talk about otherwise.
- We’re building a centralized platform to provide templates, ressources and perks for our entrepreneurs. We’re doing this with TheFamily and are opened to collaborate with others.
- We’re stepping up in terms of content publishing by providing our entrepreneurs with a copywriter to extract their knowledge and publish them. It’s good for our own portfolio and for the community as well.
- We’re working closely with Visible.vc in order to provide a better way to extract, manage, share KPIs and Reports. It’s also a way for us to measure the consistency of our portfolio companies in providing a regular set of relevant information.
- We’re launching a decentralized network of great skilled individuals and founders who can help our entrepreneurs. We’ve been inspired by First Round :)
- And because we lack transparency in this industry, we’re launching a video series starting in 2 weeks called “VC Story”: the real, beautiful and ugly truth about the venture capital industry. With TheFamily.
If you have any ideas, suggestions, we’re all hears…
It’s time to step-up our game !