Lessons from the “Dark Side”

Alyssa Jaffee
Midwest VC Musings

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I’ve been an operator most of my life, predominantly focused on selling enterprise technologies. Most recently, I co-founded TransparentCareer, a startup taking on Glassdoor to help people make more data-driven career decisions. After having a whirlwind of a year (launching our MVP, winning the New Venture Challenge, getting 25% of the market on our platform, and raising a seed round), I crossed over to the “dark side” and became a venture capitalist.

In a few short months, I’ve realized that while operators and VCs can often be aligned, they collide in ways that were unforeseen to me before I started. Not that many people have had the benefit of experiencing fundraising from both sides (in such a short amount of time), so I wanted to take on a few scenarios/characteristics from the vantage point of each. Let’s put my entrepreneur hat on, then my VC hat on. What would the two say to each other? Do they agree? Or…are they at odds?

Entrepreneur Self on Basic Human Decency — While 95% of the people in venture are awesome, there are those bad apples out there that don’t even meet par on the decency scale. Hearing comments from older male VCs like “listen girl” and “you probably don’t understand” are annoying at best and belittling at worst.

VC Self: Um wow. No talking my way out of this one. No one, and I mean NO ONE, has the right to be a jerk like that. Bar none. So, what can I do? Take a lesson from the golden rule: Treat others how you want to be treated.

Entrepreneur Self on Empathy — I always found it comical when (after hearing about my company for 10 minutes) VCs would tell me exactly what I was doing wrong and why my business would fail. Look, I get it…this thing isn’t perfect. And you’re right! We ARE throwing a lot of spaghetti at the wall here. But, I think about this business every second of every day. You don’t have to invest in my company, but just give me the respect of acknowledging I am working my ass off here. And maybe, JUST maybe…that I know what I’m doing.

VC Self: For the most part, agreed. Empathy must always exist here. Entrepreneurs dedicate everything to their businesses and the entire venture capitalist business is predicated on the fact that smart, motivated people can drive value when starting companies. The one caveat is that VCs have the benefit of pattern recognition. So yes, even if I’ve only seen your business for 10 minutes, I’ve also seen 30 companies like you and can pinpoint pretty quickly what might be successful and what might have unforeseen consequences. At the end of the day though, I should always recognize the sacrifices and efforts entrepreneurs make to grow their businesses.

Entrepreneur Self on Asking for Help — One of my biggest pet peeves while fundraising was when the meeting had about 5 minutes left, we had just been getting grilled for the last 55 minutes, and I get the question “so, how can we help?” Like UGH. Now I have to come up with some random (intelligent-sounding) answer that will appease the VCs so they can feel like they’re helping, when in reality it’s going to be something that adds zero value. The VCs that actually gave specific, tactical advice were always my favorites. YES, that small tiny specific thing you said — it helps! Even though we pitch the vision, we live in the details. And friends, the devil is in the details.

VC Self: So, this is a toss-up. On the one hand, it was a big learning for me now as a VC to try and think of one actually helpful thing I can do for every company I meet. However, that question I hated so much, “how can we help?” well…it’s actually a genuine question. First, I want to see how companies answer to see how strategic they are about the future of their business. It’s almost analogous to a job interview when the interviewer says “so, what questions do you have for me?” and you KNOW, “oh man…I’m on the spot now!” Secondly, I genuinely want to help but don’t always know how and don’t want to make assumptions about the needs of your business. So sorry entrepreneur self, but you’re not getting out of this one.

Entrepreneur Self on Data Requests As we went through the fundraising process, something that became increasingly frustrating was the pile of data requests we got after each meeting. We would fulfill those requests only to get even more, and often times, they weren’t easy to put together. I wish VCs would be a little more considerate about how much work they were asking of us!

VC Self: On this one, we’re at odds. When we are evaluating giving millions of dollars to a company, we have the right to take a peek behind the curtain and get a sense for how the company is doing. That being said, one-off requests can get really frustrating for both parties. When we aren’t getting the information we need, it slows down our ability to come to a yes / no decision, and we may end up unintentionally misunderstanding something about your business. My recommendation? Proactively put together a data room. Send it to VCs after a meeting so they can look at the information entrepreneurs have provided. This will hopefully mitigate the additional requests so founders aren’t spending copious amounts of hours during the fundraise on data requests. This is good for two reasons: 1. this shows you’re being thoughtful about how you manage the fundraising process 2. We know you are putting your business forward in the best light.

Entrepreneur Self on No’s — Getting a “no” is always hard to hear, but it is way better than the alternative…the black hole. Why do VCs always think it’s okay to just never give us an answer? I found myself sitting in no response purgatory too many times to count and it’s just not okay. Tell me what you’ve decided and move on, please!

VC Self: Okay, fair. If we know that it’s a “no”, we should at some point communicate that answer instead of going into a black hole never to be heard from again (until your next round that is…haha). However, it’s not as simple as you think. Sometimes, we actually are still evaluating and we are just trying to answer some unknowns (see data analysis above) and it takes longer than an entrepreneur might want. And sometimes, we forget. Yes, I’ll admit. Sometimes, I’m just human and forget to send a note. So bottom line — I should always be responsive and transparent with our process but if you don’t hear from me, you have full right to just ask!

So, from my entrepreneur self and VC self, I say this — despite our disagreements on a few things, VCs and entrepreneurs should be aligned. We both believe we can change the world, we both believe in big visions, and we both want to realize a lot of success. Whether you’re on the “dark side” or not, may you always “see the light” and keep on fighting the good fight.

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Alyssa Jaffee
Midwest VC Musings

Startups, venture, healthcare, go2market Now: @PritzkerVC. Before: @transparent_mba @hydeparkangels, @health_box, @chicagobooth @advisorybd