Associate or Partner? Navigating the VC Hierarchy
Should I talk directly to the Partner aka the decision-maker or to the Associate aka the influencer? This is a constant question among entrepreneurs and various people will swear by their own answer. As many things, there are no absolutes here but I would like to offer some key principles to help entrepreneurs make practical decisions. But before we do that, some quick context setting around the VC industry.
VCs come in many flavors and at least for Silicon Valley, my current definitions based on fund size are below. Note that “small”, “medium” or “large” don’t imply the excellence of a fund, they are designations or a fund’s strategy to realize a return. A smaller fund will tend to bet earlier, a larger one either more late stage or focus on owning a significant percentage in early rounds.
Next is the typical hierarchy of a large VC firm. In bold I have highlighted the three most common titles. There is obviously a spectrum among VC firms — a few are run truly as a partnership where everyone has an equal say, most are fairly hierarchical, and a non-trivial number has decided to give everyone the same title (but not the same decision-making authority). There are also enough differences among firms, for example a Partner in a large firm may be a Principal in a small fund. Finally strategic VCs will often use a different set of equivalent titles including Director and Investment Manager.
So now we turn to the question of Associate vs Partner — it really boils down to three factors.
1) Influence. In general associates will do most of the diligence and interface with you more routinely. There are for sure associates who are primarily looking to learn about a space or even dig up information from you for competitive purposes — be obviously careful in that case. And sometimes they are incentivized enough on just bringing a deal (rather than closing it) — be aware of that too. But establishing a good working relationship with an associate can be tremendously powerful as you get an internal champion whose interest in getting a deal through is aligned with you. Plus some associates are the ones who will eventually become partners.
2) Experience. A partner will most definitely have more domain experience than an associate. And he / she is the one who will eventually work with you after the deal is done, potentially sitting on the board. So there is a strong argument to focus on the partner first and foremost, with some even advocating to avoid associates completely. And obviously a partner’s word within the firm will carry far more weight than an associate’s.
3) Time. An average fundraising process is 3 months and you will be interfacing with several people. Also, VCs talk to each other across firms all the time, arguably more at the associate level since there is a higher need on supporting each other’s career at the junior level. So having multiple points of contact in a firm won’t double the work but will certainly be a significant marginal increase. Which means, splitting conversations between Partner and Associate for your A-list funds will make more sense.
The bottomline — before engaging seriously with a firm understand their culture by analyzing these three factors. Ask them plenty of questions especially in the first meeting and do your own research by asking other entrepreneurs who have pitched or been invested by that firm. If you want to truly get the right investor on board don’t get just a great brand on your cap table, diligence both the actual Associate and Partner who would be working with you. It’s only then that you can make a good decision on who and how to follow with the fund.
These are purposely short articles focused on practical insights (I call it gl;dr — good length; did read). I would be stoked if they get people interested enough in a topic to explore in further depth. I work for Samsung’s innovation unit calledNEXT, focused on early-stage venture investments in software and services in deep tech, all opinions expressed here are my own.
