@philmur posted a good question in response to yesterday's post on VC mentoring. He asked:
"How specifically would you recommend entrepreneurs better experience the mentoring potential of their VC's?"
Most entrepreneurs are usually good at some of the following:
- product development/tech
- selling
- story telling
Most entrepreneurs have little experience in:
- starting a new business
- business strategy
- managing an organization
- raising capital
- cash flow management
Most VCs are good at:
- evaluating business strategies
- forecasting operating performance
- forecasting cash flow requirements
- raising follow on capital
- managing an exit
The key to develop the maximum benefit from VC mentoring is to recognize where the VCs have vastly superior knowledge and show respect for that expertise. The ill will that undermines the mentoring relationship usually develops in either the area of business strategy or capital raising. If the VC disagrees with the proposed strategy, they rarely will tell you that you are wrong. However to barge ahead with your plan and not take the time to reach an agreement with the VC is almost always a mistake and can lead eventually to management changes. The same is true with capital raising. If you and the VC disagree it means that you have not convinced the VC and you need to continue the dialog. If after 2-3 board meetings you have not convinced the VC, you are probably wrong!
Like with good marriages, keep talking until you reach an agreement.
Miami, FL