Very well articulated article. Thank you for writing. Do you think this has come from VCs changing their narrative from "grow, grow, grow" to "growth, margin, and burn" for existing companies?
It seems like a self-fulfilling prophecy. The expectations some VCs are sharing with founders they invested in are more aligned with how boostrapped companies operate. At the end of the day, it's difficult to build a business to build a business versus building a business to fundraise.
Dec 15, 2023·edited Dec 15, 2023Liked by Charles Hudson
Hi Charles,
You clearly have the foresight and EQ to discuss those topics with your founders, and they are lucky to have you. I think that is step one and the hardest hurdle. That's not the case for many of the "Macho VCs" (MVCs) that still exist in this business, and are generally poor listeners. That basically closes off hopes of such conversation, leading the founder to choose the path that is best for their business, without the benefit of an intelligent funding partner.
Such MVCs will also have a harder time accepting that Timing plays such a huge role in the success or demise of a venture, and that maybe the entrepreneur is simply better at it, or closer to their category, to make the right call.
As such, I also wouldn't say all decisions based on timing are based on fear. Some decisions to sell or get off the VC train, for instance, can be based on a strong belief that the fundraising market is not going to improve fast enough for the next round to meet expectations, and thus protecting shareholder value - remembering that many of those shareholders are not just VCs, but employees, angels, friends and family.
I appreciate the opportunity to share my thoughts on this excellent write-up. And none of my comments relate to any personal venture experience ;)
@Charles, question on what the best way to get off the VC train is if you have a start-up with great unit economics but likely won't grow into a $100M ARR company? What are some common off-ramps?
Great article. Although I think there big nuances between VC. I’m sure there some you are happy to cut cords with and others who are very supportive depending on the values each VC represents. A corporate VC has a different goal in many cases vs. a classic VC. And yet both are from the outside. That can be stressful. Being a board observer myself, sitting inside and sharing thoughts based on an agenda you’re not allowed to fully disclose is also not a great place to be. I understand the founders perspectives.
Very well articulated article. Thank you for writing. Do you think this has come from VCs changing their narrative from "grow, grow, grow" to "growth, margin, and burn" for existing companies?
It seems like a self-fulfilling prophecy. The expectations some VCs are sharing with founders they invested in are more aligned with how boostrapped companies operate. At the end of the day, it's difficult to build a business to build a business versus building a business to fundraise.
Great article, Charles! I'm thinking through a model to help some of these startups that want to get off the VC train.
Hi Charles,
You clearly have the foresight and EQ to discuss those topics with your founders, and they are lucky to have you. I think that is step one and the hardest hurdle. That's not the case for many of the "Macho VCs" (MVCs) that still exist in this business, and are generally poor listeners. That basically closes off hopes of such conversation, leading the founder to choose the path that is best for their business, without the benefit of an intelligent funding partner.
Such MVCs will also have a harder time accepting that Timing plays such a huge role in the success or demise of a venture, and that maybe the entrepreneur is simply better at it, or closer to their category, to make the right call.
As such, I also wouldn't say all decisions based on timing are based on fear. Some decisions to sell or get off the VC train, for instance, can be based on a strong belief that the fundraising market is not going to improve fast enough for the next round to meet expectations, and thus protecting shareholder value - remembering that many of those shareholders are not just VCs, but employees, angels, friends and family.
I appreciate the opportunity to share my thoughts on this excellent write-up. And none of my comments relate to any personal venture experience ;)
Hope you're well!
Greg
@Charles, question on what the best way to get off the VC train is if you have a start-up with great unit economics but likely won't grow into a $100M ARR company? What are some common off-ramps?
Great article. Although I think there big nuances between VC. I’m sure there some you are happy to cut cords with and others who are very supportive depending on the values each VC represents. A corporate VC has a different goal in many cases vs. a classic VC. And yet both are from the outside. That can be stressful. Being a board observer myself, sitting inside and sharing thoughts based on an agenda you’re not allowed to fully disclose is also not a great place to be. I understand the founders perspectives.