Why VCs with blogs are better

There seems to be a 10 to 1 ratio of VCs doling out good advice to entrepreneurs versus the opposite. Frankly, if we entrepreneurs are insane enough to be starting a company, we should have the balls to talk publicaly about our take on the VC/entrepreneur relationship. So I'll be occasionally adding this to my regular topics in the hopes that it encourages others to do the same (that means you Daniel, Darren, and Fabrice).

I've had more than one conversation with a partner where they openly deride one of their fellow VCs with a blog. It comes down to something about either being part of a fad (I can't believe they still think that), or seeming to be pandering for their personal aggrandizement. The general tone always reminds me of discussion that Shawn and I had over coffee a couple months ago - "Who is the VCs customer? The entrepreneurs or the limited partners?"

At the time I argued "both," but as I've thought about it more, that was a bit of a cop out. Apple has to deliver performance to its shareholders, but could you imagine what Apple would look like if it started thinking of its shareholders as its customers? A lot of early-stage VCs unfortunately view their LPs as their customer. The one's that do are not hard to find -- they are quick to take credit for success and abandon problem companies, and they tend to be more tan.

Then there are the VC's that think of entrepreneurs as their customer. With lots of money flowing, it's a

competitive market for those few good deals. These VCs know that at the end of the day if the best entrepreneurs want to work with them, they have a much better chance of success. These guys are also easy to find as well; look for VCs with blogs (1, 2, 3), seed programs (3, 4, 5), and active EIR programs (6, 7). Even better if they have several of these going on simultaneously.

Why? These are good signs of a VC that is actively trying to help the ecosystem that creates valuable new companies, versus passively awaiting the perfect team to walk through the door and deliver their hail-marry deal that saves the fund. They also tend to be the one's that keep the faith through the rough patches that every successful company, especially consumer-facing ones, have to weather.

In short, these VCs are the one's you want to be in the trenches with. And at the early stages of a company, you don't want anyone around that you wouldn't want to be in the trenches with.

A VC with a blog is trying to market his brand, to build trust with you, and to eat his own dogfood. All good signs that they are trying to build mutual respect and truly understand the space, not simply "put money to work."

Comments

[Nabeel Hyatt]

Steve Kane added some good commentary on the dynamics of the relationship over at Fred Wilson's blog:

"i do think the best analogy is indeed to movie studios. for one thing, contrary to VC myth, VC is every bit as much "hit driven" as hollywood. more importantly, studios actively recruit and partner with proven "entrepreneurs" (directors, writers, stars, producers) whose value increases with success (Tom Cruise's value doesn't reset just because its an "A" round)...

so while of course newbie entreprenuers may have to go to VCs hat in hand -- as sellers -- experienced entreprenurs, like proven hollywood folks, should view their relationships with VC funds as if the VCs are the sellers."

http://avc.blogs.com/a_vc/2005/11/the_vcs_custome.html

[Shawn Broderick]

Glad to see I've dragged you over to the dark side ;-) . Fred is smiling, I imagine!

S

[VCMike]

Needless to say, Nabeel, I think your post is right on the money, but of course I am too biased.

But, you need to add a reason why a VC might blog: if they want to invest in a blog company and the founder makes creating a blog a closing condition! (hint, hint)