VC Attitude: Altruism By Default

I always tell founders that investors are supposed to provide capital, network and something that I define as a genuinely smart attitude which enables entrepreneurs to reflect on the learnings and decisions that lie ahead of them.

Until yesterday, I could not find the term to define the attitude described above and that you should expect from your investors. Maybe because it’s partly in conflict with the function of investing. But it shouldn’t as Venture Capital follows a simple logic: We are the minority shareholders of early-stage companies, dealing with 80% of uncertainty. We back people going after huge market opportunities and we trust them to build this great venture while protecting the interests of the company first and its shareholders second.

If they succeed, we succeed, it’s pretty simple. And even though the entrepreneurs and us share at the time of closing a deal the vision of building something successfully huge, we also acknowledge that the probability of building this unique empire still remains pretty small and that at some point we might just end up building yet another great company, just not a huge one.

Of course, the more capital you raise, the higher the expectations, the more violent the consequences. But it should never divert an entrepreneur from her primary role: drive a team towards finding a sustainable business model while greatly serving customers. one should never act foolishly and at all cost just because of capital expectations.

We are enablers, through capital, network and our attitude that should not suffer from any conflict that goes against the overall dynamic and equilibrium that our founders are building within their companies.

Build Karma. Be an Altruist.