Trust is a keystone of any successful venture capital career. In all private markets including VC where information is the currency of success, knowing who to trust can be both the greatest asset and the biggest challenge.
Venture in particular thrives on the flow of private information. Details such as which founders are launching new ventures, the opaque internal dynamics within firms, and which LPs are newly allocating to firms are all crucial. Yet, this essential information floats in a sea of confidentiality and competitive advantage.
Meanwhile, our careers in this industry can often feel like a solitary journey. It's not just about managing investments but also managing relationships and the strategic exchange of intel. Finding trustworthy peers and mentors for the journey is not just beneficial; it's necessary. These relationships serve multiple roles—from sounding boards for decision-making to allies who can offer tangible assistance along the way.
Your peers provide more than just companionship on this path, as they can also offer trusted insights for decision-making. The exchange with dependable peers can identify promising deals, provide context during challenging times, and amplify your success through collaborative efforts. However, it’s always helpful to remember in some respects that you’re in constant competition with those very peers you’re relying on.
Mentors, on the other hand, can guide you through navigating firm politics and making strategic career moves. The right mentor can illuminate the path forward and shield you from potential missteps, offering advice drawn from years of experience. And their motivations typically aren’t relying on that which is a competitive threat.
In VC, information exchange can often resemble horse-trading, where knowing the internal dynamics of a firm or understanding the background to a deal can make or break investment decisions. However, sharing information comes with its risks. The venture community is tightly knit, and information shared in confidence can quickly become pseudo-public knowledge, sometimes even despite the best intentions of supportive colleagues.
For instance, during my own career transitions, I learned firsthand how quickly information spreads. Both times when I switched to new jobs I found that I was tripping all over myself networking… word spread really fast! People start talking even when they’re trying to be supportive. What was intended as a confidential search became “known” sooner than I’d hoped which directly affected my processes, especially when we were launching NextView. This experience imprinted on me to be extremely judicious about what information to share and with whom.
Trust is not just about information, but also relevant to tangible actions. When someone offers to do something to assist you, are you able to count on them to follow through? I’ve found that there can be a lot of empty talk in this business. For example, well-intentioned peers (and mentors!) verbally offer intro to founders, LPs, prospective portfolio company customers, or even possible strategic acquirers… but then they don’t always follow through. Even simple commitments from other VCs, like speaking on a panel or even joining a dinner invitation is often met with flakiness which would be unexpected in other realms.
Deciding whom to trust is not a binary decision where people are simply trustworthy or not. Instead, it depends on the sensitivity of the information, the context of the exchange, and the potential consequences of that information becoming “public.”
There are some peers who it’s clear that you can’t trust at all. Many will fall into a gray area where their trustworthiness may vary based on circumstances. However, there are a small number of individuals who prove themselves reliable time and again. These are the people with whom you can share openly, knowing they will act as they say and absolutely respect the confidentiality of the information shared.
Once you identify those previous few where you feel safe to be transparent and who are dependable, cultivate those relationships further! Hopefully they can become not only your confidants now, but the bonds can foster investment collaborations and even partnerships as you venture together for years.