When your customer calls you dumb, real stupidity is not listening
Andy Dunn is a good VC customer — having raised $80M — so when he takes the time to complain, the smart people like Mark listen…and try to learn from it. It hurts when a good customer calls you and your colleagues dumb but I think arguing the points rather than accepting the criticism is a mistake.
The exact numbers are not important to me. This is about service.
2% of returns, 10%, 25%…who cares. The future of VC is not the point. The point is what a single VC did to get an entrepreneur who has raised a ton of cash from great firms to root against 98% of the industry.
Here is a founder asking VCs to have the humility to recognize “they may or may not need to put their handwriting on what transpires” and to focus on “making game changing introductions and subtle suggestions.” Andy was disappointed with the time it took for this VC to make a decision, he doesn’t want them to call him after they invest, he is mad they never tried the product (but have lots of opinions about the product) and he thinks their portfolio sucks. He also hates that they were late.
Wrapped around, over and through this list of criticism and accusations is the entitled, buy-side approach the VC brought to the relationship. The entitlement of “I can’t believe you didn’t call me before you raised your round…” makes me mad too. In my experience, the best opportunities to partner with great founders always become competitive and then VCs go into sell mode — I wonder why more investors don’t take a sell-side approach 100% of the time and I believe the best ones do.
The portfolio attack is gratuitous…everyone would like to have two billion dollar exits — but the concept of valuing long term partnerships that create tremendous enterprise value should resonate with every VC and every founder. When I meet a founder who has all the ingredients, the chocolate, the eggs, the sugar and flour, I have to be careful that I don’t see brownies when they are baking chocolate cake… Andy doesn’t want heavy handed vision for the company or a specific road map based on an investor’s view of the future for his industry. Makes sense to me. I would never risk my company on someone else’s vision either.
Common sense says listen, take the time to build a shared vision of the company and the industry and then partner to do everything you each can do to make sure the company wins. Success in this (and some luck) likely puts both the founder and the VC in the top 1%. The letter to “dumb VCs” resonated with me as a customer complaint about poor quality of service. If a customer calls me dumb I start looking for ways to be smarter for the next customer and do everything I can to deliver a much better service — or I will be out of business.