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- "Founder-friendly": Originating in the late aughts/early 2010s in the wake of "vulture capitalists," the phrase seems outdated today.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]"
Yes, "not a fit" is quite difficult. I similarly try to point to some specific area (go-to-market concerns, absent team expertise, uncertain technical risk, etc.) which gives me pause if we're not pursuing an investment after spending time with a Founder. However, sometimes it's challenging to pinpoint especially if the company is early in its formation stage.
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."
All of these a great, Chacho, and resonate with me. I particularly like avoiding the game label & metaphor, though I sometimes have found myself using language around investments as "bets" occasionally which I've tried to curtail.
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]"
Yes, "not a fit" is quite difficult. I similarly try to point to some specific area (go-to-market concerns, absent team expertise, uncertain technical risk, etc.) which gives me pause if we're not pursuing an investment after spending time with a Founder. However, sometimes it's challenging to pinpoint especially if the company is early in its formation stage.
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."
All of these a great, Chacho, and resonate with me. I particularly like avoiding the game label & metaphor, though I sometimes have found myself using language around investments as "bets" occasionally which I've tried to curtail.