A guide to delivering on your value-add
VCs love to boast about their “value-add”. An investor, especially in today’s competitive market, is expected to help beyond capital. This is implicit in the agreement and often made explicit in the reverse pitch.
Some investors follow through. Others may not.
In both cases, most investors are well-meaning in their desire to help but few do according to this report. There’s often a gap exists between VCs' perception of their value-add and founders' experience with 61% of founders rating their value-add experience as below average. Another source says that VCs think they add about 30% more impact than what founders report.
This post is all about how to actually be helpful as an investor. We dive into the tools and processes investors use to support their portfolios, the dos and don'ts when helping, and more.
If you only have a few minutes, here are some takeaways on how to be helpful:
- First, do no harm. Of course, direct harm is an easy thing to avoid, but some investors lack the self-awareness to know that they’re not helping. They might bug the founders too often with distractions, steal their time with unproductive meetings, or provide terrible advice in areas they’re unqualified to help in. There’s another class of actions that selfishly prioritizes the investor over the company. It’s far better to do nothing than to be a drag.
- Showing up goes a long way. Showing up consistently for portfolio founders, whether it’s promptly responding to their emails or attending an event, engenders trust in the relationship. You might be surprised how much founders appreciate a simple, thoughtful reply to their investor updates.
- Deliver on your value-added superpowers. Consistent support isn’t enough. The quality of help you provide matters too. Investors often have a unique set of skills, experiences, and networks that should complement the founders. The best investors identify their superpower, communicate it to their portfolio, and follow through when asked for support.
- Use your network to compensate for weaknesses. Investors have massive networks, often larger than the founders they back. Tap into this network – portfolio founders, co-investors, LPs, friends – to help founders in areas you cannot. Using your network is not a sign of weakness.
Shoutout to Vijen Patel and Brittany Graunke (81 Collection); D’Arcy Coolican (Seams); Maria Tangarova (Chapter One); Mark Scianna (Forward Deployed VC); and Terrence Rohan (Otherwise Fund) for contributing to this post.
The do’s and don’ts
The support portfolio founders receive from investors is a function of the consistency of support they receive and the quality of support they receive.
We asked fund managers about the habits, processes, and tools they use to follow through on their value-add promises.
Always show up
Consistently showing up for portfolio founders, through the ups and downs of building a company, builds trust. This can take multiple forms: Responding to investor updates, helping with a crisis, showing support publicly, etc. The more they trust you as an investor, the more likely they are to reach out in the future, which in turn creates more opportunities to deepen that trust. This goes both ways: Trust can be broken (or never built) by a lack of responsiveness.
Mark Scianna from Forward Deployed VC always shows up, whether it’s responding to an update, attending events or more.
“It starts with showing up, which is a basic but important part of any relationship. Take the call, respond to the update, leave the camera on during board meetings, attend the launch party, and make an effort to connect in person. A fun example: Turion Space invited us to the rocket launch to deploy their first satellite in space. What a monumental milestone – of course we went! But before that, it was a trip to visit their lab, and before that it was coffee with the CEO. Showing up builds trust and surfaces new opportunities to support founders.”
— Mark Scianna (Forward Deployed VC)
Help while you sleep
Investing is a services business, but that doesn’t mean portfolio support should be limited to one’s manual efforts. Increasingly investors are building products to help their portfolio.
Alexis Ohanian and the Seven Seven Six team built Cerebro to help manage, execute, and report their progress. SignalFire built Beacon AI to help with recruiting, market research, and GTM. Weekend Fund built a tool called Rolodexer to search their 250,000+ followers on X to help with customer intros, recruiting, and expert help.
"The Twitter (now X) graph is underrated and underutilized. We built Rolodexer to connect portfolio founders to potential customers, promising recruits, and domain experts. With over 250,000 followers, most of whom work in tech, we have a semi-warm intro to a massive network that’s often responsive to thoughtful DMs. Most social networks and CRMs are focused on who you know. Rolodexer is focused on who knows you, and for many people the latter is 1,000x+ larger.”
— Ryan Hoover (Weekend Fund)
Stay attentive to updates
It’s hard to help if you don’t know what’s going on with a company. Updates from founders, both regular investor updates and one-off outreach, are often to best way to know what a company needs the most help with. Pay particularly close attention to the asks section.
Vijen Patel and Brittany Graunke from 81 Collection aim to always respond to their founders, building trust with them and making them more likely to reach out in the future. They also send a weekly internal email with any outstanding asks from portfolio companies.
“Number 1 rule: Always respond, and respond thoughtfully. No email, be it an update or a small ask, goes unanswered. We respect our founders' time and respond to every email sharing requested input, support, or asking questions. Also, every week I send an email internally sharing updates across all portcos from the week prior. We then discuss as a team and respond to any outstanding asks.”
— Brittany Graunke (81 Collection)
Avoid diluting support as the portfolio scales
For growing portfolios, it’s easy to let the quality and consistency of support for each company wane as a portfolio grows. Be aware of the risk of portfolio support “slipping”. Processes, tooling, and portfolio support teams can help combat this.
Chapter One built a tracking system that records every touchpoint with their founders. Similar to how founders send them investor updates, the firm does the same, delivering an email update summarizing everything they’ve done. This creates accountability and serves as a reminder to founders to ask for help.
"At Chapter One, we believe we can only improve what we can measure and we like to keep ourselves accountable. We have built a robust tracking system that records every single touchpoint we have with our founders. Whether it's an introduction, a check-in, or product session, we track all of the work we do for our founders giving us a detailed support picture across our portfolio.
At the end of each month, just like our founders send us Investor Updates, we send them Founder Updates: an email recap of everything we helped the company with for that month based on their needs/asks.
We treat every partnership with incredible care and mindfulness, doing everything we can to make our founder's journey a bit easier as they build generational companies. This tracking system is just one of the tools we have built that helps us proactively tailor and retroactively adjust our support for each founder and report our value-add directly back to them.”
— Maria Tangarova (Chapter One)
Tailor the “value-add” you deliver
The only way to actually help a founder is to deliver (1) something they need in (2) an area you can help. Of course, this is obvious but can get lost by some and result in needless distractions or even worse, poor guidance.
D’Arcy Coolican from Seams is upfront about what he is (and isn’t) good at. He makes this explicit online. While it’s not necessary to be as direct as D’Arcy about your weaknesses as an investor, knowing them will improve the quality of support you provide portfolio founders.
“Try to pay really close attention to update emails as well. Usually, these are the most pressing issues so I find it beneficial to the founder when the update emails have clear and precise asks.
I also try to have a conversation with founders upfront (either during the diligence process or right after investment) about where I can actually help. It's a small investor version of the 'company onboarding' we used to do at a16z. I articulate what I am good at (and importantly not good at), how I work with other companies, and then they talk about the challenges they see in the near term and long term.
Usually, there are one or two clear areas that line up and I can make sure I am always focused on that rather than being random or not doing anything at all. I have tried to be as clear and precise with these 'what I'm good at, what I'm bad at' categories on my website which can sometimes be helpful.”
— D’Arcy Coolican (Seams)
Don’t be overbearing
Investors, even well-meaning ones, can risk coming across as overbearing to founders. Founders have many demands on their time. Too many ask to “catch up” without a clear agenda, adding to those demands in sometimes unproductive ways.
“When I was building Product Hunt, especially in the early days, every hour mattered. Like many founders, I had a waterfall of things to do and a thirst to prioritize things that truly matter. Our investors were exceptional but occasionally I would get called to catch up over coffee without a clear agenda. I don’t fault them for asking and their intent is genuinely coming from a good place, but it was also a distraction away from urgent priorities.
We try to be extremely mindful of this at Weekend Fund. We never ask a founder to meet without a clear purpose that aligns with their priorities.”
— Ryan Hoover (Weekend Fund)
Identify your superpowers
Each fund has its mix of strengths, experiences, and values that it uses to support founders.
We asked some fund managers: “What are your superpowers when helping portfolio founders? Can you share a specific example of how you used this to support a founder?” Here are some of their replies:
81 Collection’s superpower
“At 81 Collection, as former founders and operators, we know how isolating being a founder can be. Our empathy for the founders building in un-sexy industries is a superpower. We proactively work to lighten the load for our founders to save them precious time by connecting them to the right person or working through learnings of a relevant experience. This accelerates times, lowers burn, and even adds revenue.”
We also know hiring can be one of the most time-consuming and important parts of a founder's role. With our operating experiences, we have pre-vetted candidates who cross our desks regularly interested in startup roles. We're in the process of building out a founder-focused database that gives founders direct access to potential candidates. In turn, it will help us identify where we need to support efficiently sourcing more amazing candidates for open roles across our portfolio. For one company, our relationships helped source 4 of 6 founding hires.”
— Brittany Graunke (81 Collection)
Otherwise Fund’s superpower
“In terms of superpowers, more generic is around architecting fundraises (inc investor intros, etc), and maybe things we do a little more unique is offering them unique funding options (SPVs, secondaries, etc), helping them navigate conflicts/tricky situations with their major investors/board or co-founders. Softer, but importantly, we want them to feel empowered and energized after every conversation”.
— Terrence Rohan (Otherwise Fund)
Seams Capital’s superpower
“I've always strongly believed that the most valuable thing a pre-seed or seed investor can do is lend a founder their credibility in the very early stages. Marc Andreessen used to call it a "bridge loan of credibility in advance of tangible evidence." I think the majority of what I add is in that vein.
It manifests in two ways usually: introductions/references during their fundraising process and helping articulate why their type of company is actually venture-backable. Lending my credibility to both the founder and to the category more broadly.
Beyond that, it's just helping in the specific areas I have experience in (growth, network effects, etc) where they are drinking from the firehose. I think this can be helpful but is less differentiated as there are lots of people who know and understand these areas.”
— D’Arcy Coolican (Seams)
Forward Deployed VC’s superpower
“We look for opportunities where our spikes of expertise intersect with opportunities to help founders win. Our venture team is unique: we are builders out of Palantir backed by a motley crew of deep tech operator LPs still in the game. This extended team includes nuclear engineers, classification experts, hackers, designers, spies, machine learning specialists, government contracting officers, and over 50 OG Palantir forward deployed engineers”.
— Mark Scianna (Forward Deployed VC)
Venture is a long game and the reputation investors build through the support of their portfolio is a critical part to staying in business. Investors sometimes forget that founders do reference checks too. :)
Consider asking yourself:
- How responsive am I to portfolio founders?
- What’s my superpower? Is it unique?
- Should I introduce processes or tools to improve how I support founders?
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