VC Fundamentals Part 3: Company Building

We continue our VC Fundamentals series with Company Building — everything that happens after you write the check. We catalog the different categories, strategies and tactics for VCs to "add value" to their portfolio companies, from direct involvement to portfolio services to simply doing nothing (often better than many alternatives!). For both of us, this is the best and most fun part of being an investor, and we hope that shines through in this episode. Here's to building great companies!

Sponsors:

• Vanta

 

Topics Covered:

• The goals of Company Building: 
  1. (Obviously) add value to your investments
  2. (Less obviously) increase your odds of finding/winning your next investments
• The four categories of company building: 
  1. "Direct" work by the GPs
  2. "Active" platform and portfolio services teams
  3. "Passive" brand halo effect
  4. Simply "doing nothing"
• Activities you actually do: 
  • Board work (both governance and strategic/operational planning)
  • Planning and orchestrating future financings and exits
  • Recruiting, closing deals and "selling"
  • Cofounder/executive disputes and departures
  • Pivots and company shutdowns
• And perhaps the most important company-building advice of all: Don't Freak Out.

 

Links:

• Our interview on the main show with Doug Leone:  https://www.acquired.fm/episodes/sequoia-capital-part-ii-with-doug-leone
• Fred Wilson's great post on pivots vs. shutdowns: https://avc.com/2018/11/pivot-or-fail/

What is ACQ2 by Acquired?

ACQ2 is Ben and David's conversations with expert founders and investors. Acquired the stories of great companies — and ACQ2 dives deeper into the lessons we can learn from them, often with the protagonists themselves.