Venture Language that I Choose to Use (and Not to Use)
What you say means a lot.
Language almost always carries meaning beyond just the literal. Even in a business context, the language which we choose reveals how you think about your role and the values which you espouse. Unlike many of the other Venture Upward posts which are quite prescriptive in nature, this one is intended to be less so. Rather, my intent is to provide a window into my own thinking about some of the language bits and phrases I choose to use on a few topics in venture. The aim is to catalyze deliberate thinking about the language other readers use daily and what that communicates to your colleagues, co-investors, founders, limited partners, and others in the entrepreneurial community.
On potential investments. I endeavor to call potential investments just that, “potential investments” or perhaps “opportunities.” Whereas I don’t like using the phrasing “deals.” Potentially making a commitment to a Founder to work together for the next decade is more than just the transactional implication of reaching an agreement. The deal is merely the beginning. I am not searching for the next opportunity just to move on looking for the next one. And so I look for language that emphasizes both the venture which is being built and the founding team behind that startup… rather than the occurrence for beginning the relationship.
On portfolio companies and founders. This one is really about avoiding a phrase, “My portfolio company [x]” and “my founder [x].” I don’t like using the possessive, as it implies a status which isn’t an accurate reflection of the relationship which I endeavor to have with entrepreneurs and the companies which they’re building. Yes, technically we as a venture firm do own a share of a portfolio company, but it’s certainly largely the founders’. Admittedly, the problem with avoiding the possessive is that I haven’t found a strong suitable alternative. Often I’ll say something like “the portfolio company I work with” or “founders in our portfolio.” Yeah, honestly it’s quite a bit clunkier, but we don’t own the founders. We serve them. It’s just not a possessive relationship and I prefer not to talk about it that way even if it’s easier.
On dissent. All of us at NextView use the phrase “I support you” as a matter of design in our decision-making voting process at the firm. It’s the language we use when we’re essentially voting “no.” We can disagree with a decision on a specific investment opportunity, but regardless of outcome, you still always support your partner. While one investor may have legitimate concerns about the opportunity, they trust the diligence of and enthusiasm for their partner to make the right decision and work to make the investment successful. Though the directive is quite clear, the meaning behind how it’s communicated is also intentional. It’s framed not as a negative, but rather with the positive aspect of the dialog - that once the investment is made, I am 100% behind it and will do whatever I can to help the company and my partner in support.
My partners and I have other unique language which we’ve incorporated in the culture of our firm, which I will likely share in a future blog post. I’d be curious about other readers’ deliberate and sometimes perhaps non-standard language which you use in the day-to-day of VC. I’ll leave the comments open below for others to contribute.
I've also stopped using the term "deals." Beyond the transactional undertones, it mistakenly likens venture to taxidermy ("how many deals did you do this year?"). Venture investments are not inanimate objects to hang on a wall and marvel at; to the contrary, they're very much living things that often need active support to survive. Plus, these are real companies run by founders who are putting their entire livelihoods and financial health on the line. They're not cocktail party fodder.
Other terms I avoid, which may be more contrarian:
- "Founder-friendly": Originating in the late aughts/early 2010s in the wake of "vulture capitalists," the phrase seems outdated today. I find it disingenuous at best, neglectful at worst. Sometimes the best way that I can support a portfolio company is to disagree (respectfully) with a strategy change or to tell a hard truth. We also have responsibilities to our LPs, who frequently have goals that differ from founders'. So instead, I like to say "we work closely with management teams post-investment." This feels more honest to me.
- "Bets": Venture is about making calculated investments that can achieve a risk-adjusted return above a certain hurdle rate. Betting is rolling the dice and hoping you get snake eyes. The latter is a game of chance, the former is a game of skill (and admittedly, some luck). And like the above, we serve LPs too. I know of very few LPs looking to back managers that liken capital deployment to a dice roll.
- "You're not a fit": This one's the hardest. There's not enough time in the day to write novellas on why you're passing on a specific opportunity, when that's the outcome 99/100 times. But "not a fit" is lazy, especially after I've literally seen SOMETHING that the company was doing that made me initially want to jump on Zoom/meet for coffee/ask for their deck. Instead, I try to say "We'd love to talk to you again when you've achieved [X thing that they company says they'll do/build, but haven't yet]"
Love this discussion! A few additions that come to mind:
- The “game" of venture — Founders are building companies and venture investors are funding founders via a partnership. I have a hard time calling venture a game when people’s livelihoods and life’s work are at stake.
- "We’re a family" — I've heard both early stage teams and funds call their team "a family." I think this ends up backfiring long term. A more appropriate term is "a team." In practice, is that it’s easier receive feedback as a teammate vs family member. I’ve also seen the family descriptor go sideways during difficult layoffs.
- "We" — I typically (even when I can clearly take credit) say, “we did [insert outcome].” It’s almost always a team effort even if a team member gives you the smallest suggestion or 5 minutes of their time.
- “Yes, and” — Demonstrates that you actually listened to your team member’s point of view even if you may not agree. “Yes, and I think you should consider X."