New Venture Partner? Wisdom on Navigating Your Role
Our advice for new venture partners looking to grow in their role and career.
Being a VC is a lot like being an entrepreneur, however, it comes with its own special flavor of stressors. VC firms and the industry itself offer an environment ripe with dynamics that stir up insecurities, questions of self worth, and ways our sub-optimal parts show up in our work-world in ways we’d like to change or gain more awareness of. Ultimately, the trick to getting through with your best self at the helm is learning what drives you and knowing what kind of VC you’d like to be.
What follows are some highlights from what we see arise for new venture partners as they grow into their role and careers.
“How do I know I’m doing a good job?” is a common question that can haunt new VCs. When you mix type A’s who have excelled in a structured environment in the past (like school) and put them in a situation where the outside feedback comes very slowly (such as the long time horizons in venture capital) and put them in a place where the internal feedback is usually non-existent (or not helpful), it can be exceedingly unnerving. Most of the folks we talk to who are new to the VC world have no idea if they are doing a good job in their role.
“This unsteady ground leads to lots of anxiety, lots of panting, lots of frantic activity, and sometimes a lot of company meddling,” notes Dan Putt. “It can also lead to a fixation on wanting the plan for success.”
How do you seek (and receive) feedback? Doing 360 reviews is one way to get feedback from a wide range of people in your world and a way to do so on a regular basis. It can help you identify real areas for growth for you as a member of the firm, in your role, as a board member, and as an investor. Learning how to give and receive feedback can reap dividends individually, and the firm as a whole.
What does success look like to you in your work in venture capital? What are the images you’re comparing yourself to? “I see lots of VCs who think they need to emulate the outspoken, well-written approach of well-established and successful faces in the business,” Putt says, “this brings up all kinds of deeper feelings for folks such as “I’m not good enough,” “I don’t have it,” “I don’t know what I’m doing,” all of which is something a lot of founders struggle with too in their own way.”
There are a few guiding questions to follow: “What kind of VC do I want to be?” and What does it mean to be a good venture partner at your firm? Each of these questions has different origins. The first comes from self-exploration — what we like to call radical self-inquiry. The latter question points to understanding what’s operating where you work. What are the existing dynamics at play? How does leadership work? Who are the personalities in the room? Who makes decisions and how do they get made? What would you like to influence, and what room do you have to do so? Understanding the other forces at play is good to know. Knowing what’s up for collaborative revision, or not, is also good information.
“I hear new VCs comparing and contrasting what they’re trying to do, and how they’re trying to do it,” Jim Marsden notes. “This is juxtaposed against more traditional benchmarks of growth, scale, and financial success. They struggle with an inner conversation with themselves, as they. try to find and bring forth “their way” and have it be different, and they’re also conflicted with living up to the external yardsticks of performance standards and recognition of success that are established by the big, established, brand-standard VCs.”
Learn what you need to do your job well and find good mentors. Who do you know who’s done it before that you can ask for help or support? Who can you take your questions to? If you have mentors or a group of like-minded VCs, what are the ways in which you can connect and learn from them? Know the structure and systems needed to do your job. From the parts of the job that require knowledge of how things work (like cap tables and valuations) to the less technical parts like negotiations, all the way to the people-rich places such as building your networks, interfacing with founders, and holding a board seat.
What is your relationship to risk? To add to the uncertainty, as a VC, you’re in the business of making bets. A certain comfort level with uncertainty is part and parcel of the role. What you decide to bet on, and how you make those decisions takes into account many factors — gut and intuition, analysis, and how you think about the world. Part of your job as a VC is to think critically about the world and its drivers. What makes the economic wheel go round? How does the world work? What’s emerging in the landscape now, and what does the future call for? To summon Wayne Gretzky, a big part of your job is to skate to where the puck is going to be, not where it has been.
As a board member and investor, how can you establish generative relationships with your founders? Trust between investors and their founders is a hard-won thing. One of the things to realize about your role as VC and board member as it relates to your founders is that you are in an up-power position. This naturally makes trusting your investors a hard thing to do as a founder. It’s common for some founders to assume their investors are mostly concerned with making money at the cost of all else.
In our coaching practice, one of the most common questions we receive from investors is, “How do I build more trusting and impactful relationships with leaders in my portfolio?” As coaches, we believe the core challenge that limits the ability for founders and investors to connect in a more collaborative way is rooted in the dynamics of power. In this short clip, Dan Putt and Andy Crissinger define the three dimensions of power and share their advice for navigating power differences to build better founder-investor relationships.
What do you do when fear hits? Knowing what is in your scope of influence and what your responsibility is as a board member can help you assess how to step in and help when and if things start to go haywire in your founder’s organizations. When fear hits the first impulse is self-preservation — -this is true for all humans. But this is especially so for investors and board members who have not lived through multiple downturns, notes Jerry Colonna, Reboot CEO, co-founder, and former investor. “The consequence of not being able to self-soothe is that you are drawn to behaviors that would optimize your firm’s position in the company,” he underscores. “And to do so is a direct violation of your fiduciary responsibility to use your best business judgment to represent the best interest of all the shareholders, including even those individuals that hold just one stock option.” When fear takes over, it’s best to remember both your purpose and your responsibilities as a leader.
Over the years, we’ve had some in-depth conversations with VCs on their role and what they’ve learned. Check out our full catalog of episodes here.
