Should investors act as coaches/mentors deeply involved in company building, or as patrons who stay out of the founder's creative process?

George Zachary · Oct 12, 2020

Investors should back founders who just want the money and want you out of their way, not founders who want help and coaching

Founders like Steve Jobs or Larry Ellison don't want coaching because they are very smart, know what they're doing, and already have proof the business works — so the last thing an investor should do is get in their way

10:25 20VC: CRV's George Zachary on His Relationship To Money and How it has Changed Over Time, Why The Best Founders Have Often Experienced Parental or Home Instability and The Stories Behind Investing in Unicorns; PillPack, Yammer and Udacity

George Zachary · Oct 12, 2020

Board members should operate 'nose in, hands out' — pay close attention to the business but never get operationally involved unless the founder asks

An investor getting involved and screwing up the company is the worst thing you can do, while helping when the founder asks is the best; boards only really control hiring and firing the CEO and merely influence everything else

Scope: exception when the founder actively wants involvement

32:16 20VC: CRV's George Zachary on His Relationship To Money and How it has Changed Over Time, Why The Best Founders Have Often Experienced Parental or Home Instability and The Stories Behind Investing in Unicorns; PillPack, Yammer and Udacity

Jeff Jordan · Jan 16, 2023

The entrepreneur must be the one steering the company, and an investor who has already scratched the operating itch is not tempted to take the wheel

Having run tech businesses for over a decade, he no longer wants to operate, so he can appreciate the founder's effort without wanting to intervene

5:44 20VC: a16z's Jeff Jordan on The Ultimate Guide to Investing in Marketplaces, Two Core Features to Look for in All Marketplace Investments, Why Fragmented Supply is so Important & Lessons from Airbnb, Pinterest and Instacart on What Makes the Best Cohorts

Ophelia Brown · Mar 17, 2023

Investors shouldn't assume they can supply the ideas and drive; founders have to want to do the building themselves

You can throw many ideas at a founder but the ambition, drive and ideas have to come from them

Scope: a lesson she learned early

18:47 20VC: Why Growth Investors Ruined the Venture Market, Why Marketing in Venture Has No Substance, Why Follow-On Investing Can Damage Returns and The Mistakes VCs Made in the Last 18 Months with Ophelia Brown, Founder @ Blossom Capital

Terrence Rohan · Feb 5, 2024

At seed the investor should be a patron, not a coach — greatness has to come from the founder and coaching-style involvement is too intrusive

Company building is a creative process like painting; the investor supplies money and support but should not opine on the creative process

Scope: specifically at seed stage

74:01 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Brad Feld · Sep 30, 2019

Declarative advice is hard for both entrepreneurs and VCs to process, especially in real time, so assertions should be offered as data for the other person to internalize rather than as directives

Directive statements are difficult to process in real time; framing an assertion as data lets the other person decide what to do with it

Scope: not arguing the other extreme — that everything should be interrogative or Socratic; intermixing assertion and question is the goal

46:07 20VC: Brad Feld on Why Market Size At Early Stage Is Not Helpful, His Biggest Learnings From The Boom & Bust of The Dot Com and How The Best VCs Work For Their CEOs

Jason Lemkin · Nov 30, 2022

His early mistakes as an investor all reduce to 'acting like a VC' — telling founders how to raise money and how to run things rather than letting them run their company

He had absorbed patronizing behaviour from the abusive VC generations he raised from as a founder, saw himself doing it, and course-corrected immediately

Scope: about his first investment, Pipedrive

33:13 20VC: Jason Lemkin on Why Founders Do Not Care About Their VCs Anymore, Why Zoom Made Us All Worse Investors, Why 80-90% IRR Should Have Been Warning Signs and the Algolia Journey From Seed to $2.25BN Valuation

Jeff Jordan · Jan 16, 2023

Investors should never be prescriptive with founders, instead sharing what they tried in similar situations and what happened

The investor spends a twentieth of the time thinking about the business; if you picked the founder well they should be making the decision, and an entrepreneur who does whatever you say is the worst outcome

6:28 20VC: a16z's Jeff Jordan on The Ultimate Guide to Investing in Marketplaces, Two Core Features to Look for in All Marketplace Investments, Why Fragmented Supply is so Important & Lessons from Airbnb, Pinterest and Instacart on What Makes the Best Cohorts

Katherine Boyle · Oct 1, 2020

The core superpower of a former journalist as an investor is listening to the founder's story, deciding whether you believe it, and then acting as a Socratic guide who pressure-tests the founder's conviction over the ten-year journey

She has always been a chronicler rather than a builder, so the reactive listening model is more natural to her than partnering side-by-side to build

Scope: describes the reactive rather than proactive model

12:09 20VC: What Is Founder Narrative Fit and How to Detect and Invest In It, How To Avoid Consensus Thinking When Investing, Price Sensititivity; When To Pay Up vs Stay Disciplined & From New York Times To General Catalyst; Why Venture and Journalism are Not S

Phin Barnes · Oct 2, 2023

The most valuable way to help someone is to truly listen and draw out the answer that is already inside them, rather than supplying your own

The answer is always there in the person; the skill is bringing it out and then supporting them in going after it — and it works for founders on strategy as well as friends on personal situations

48:45 20VC: The Services Model of Venture Capital is Broken, The Best Founders Do Need Help, The Most Important Signals to Assess When Meeting Founders & Why Kids Bring Less Happiness and More Joy with Phin Barnes @ TheGP

Marcelo Claure · Jul 31, 2023

Every founder needs something from investors, however smart they are; an experienced investor always has something to add

Having seen many industries, founders and models at SoftBank gives perspective that can guide founders, whether that's heavy support or a single phone call

Scope: some founders will ask for a lot, others for very little

8:08 20VC: Marcelo Claure & Shu Nyatta on Lessons from Investing $7.5BN at Softbank & Why Dumb Money has Gone, Why "LATAM is Under Construction" and the Next 10 Years Will Be the Best & Investing Lessons from Missing Nubank & OpenAI & Investing in FTX

Harry Stebbings · Feb 5, 2024

Mentorship is real: you can have a relationship where someone who has done it before imparts a higher degree of wisdom because of their experience

75:04 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Phin Barnes · Oct 2, 2023

Every great founder needs help — they constantly access the best advice and hands-on support; what they don't need is help from VCs.

When a VC says the best founders don't need help, what they really mean is those founders don't need that VC's help; in reality every great founder has a trusted group of advisors and operators doing unbelievable work for them.

26:31 Great founders need help just not from their vc real help comes from trusted operators

Phin Barnes · Oct 2, 2023

When a founder starts answering the board by saying 'well, Dan says…', it is a signal of how much value that partner is delivering

He watched founders in shared board meetings shift from stating their own view to deferring to Dan's, which earned Phin's respect and made him want to work with him

52:10 Founder deferring to mentors advice in board meetings signals real mentorship value

Akin Babayigit · Jun 26, 2023

VCs cannot genuinely add operational value to a truly exceptional founder; their real value is emotional support in bad times and friendship in good times

Exceptional founders already operate at a level VCs can't improve on, so what remains is presence and friendship through the swings

0:00 Vc value for exceptional founders is emotional support and friendship not operational help

Chris Paik · May 8, 2023

The right role for a venture investor is pacesetter, not racer — keeping founders focused when circumstances change rather than running the company

In a race the pacesetter isn't competing but keeps the competitor in the right mindset; founders are the ones running the race

6:29 Investor as pacesetter keeps founder focused without running the race

David Tisch · Feb 5, 2024

The concepts of 'coach' and 'mentor' don't apply to investor-founder dynamics; what exists are relationships, and hierarchical words distort them

Hierarchical labels can't be applied to relationships

74:54 Hierarchical coach mentor language misdescribes investor founder relationships

Shu Nyatta · Jul 31, 2023

The claim that great founders want to be left alone is wrong — average founders want to be left alone, good founders want coaching, and great founders want to hear the truth

Even for a world-class founder, a good board meeting acts as a crucible where truth-seeking in a group is transformative for the company

8:08 Great founders want truth not to be left alone