A few minutes ago TechCrunch founder Michael Arrington wrote a post on his blog Uncrunched discussing a question that VCs (particularly new VCs, I’d imagine), are frequently asked: how Venture Capitalists can differentiate themselves from the rest of the bunch.
The post dives into the things that VCs can do to actually add value (beyond their checkbooks), and outlines what really makes for the perfect investor.
The key thing, he says, is for investors to keep their hands off when they’re not needed, and to swoop in with guidance, key connections, and to help land major recruits when a company really needs their help. That’s easier said than done, of course — which is why excellent investors are both rare and very valuable.
One of the most helpful investors in the valley is Ron Conway, who founded SV Angel and has famously invested in many of the industry’s most popular startups, and is well-known for really going to bat for young startups — sometimes against much larger corporations and other VCs. As Mike writes, Ron has played an instrumental role in helping many companies escape “the jaws of defeat”, but we rarely hear the full tales because of their sensitive nature and the people involved.
But, as it turns out, SV Angel’s large portfolio may be looking to Conway’s help a bit too often. As part of the post Mike included an email sent yesterday by SV Angel Managing Member David Lee to the firm’s portfolio companies, explaining that while Conway is indeed a key member of the team, it is not his full-time job. Rather, he’s a limited parter that the SV Angel team calls on whenever there’s an especially important deal to be done, or hire to be made.
He’s their brain surgeon — but if people keep asking him to help out with their stomach-aches, he’s going to be overwhelmed.
Here’s the email:
From: David Lee
Sent: Monday, October 10, 2011 9:10 PM
Cc: SVA Partners
Subject: Understanding Ron’s Role at SV Angel
CONFIDENTIAL – DO NOT FORWARD
Friends and Colleagues,
I want to clarify Ron’s role at SV Angel and how he works with us. This is very important because many of you still email Ron on most business matters, which is causing unnecessary bottlenecks.
Ron is not involved with day-to-day operations of SV Angel. He is not a General Partner in SV Angel. He is the (largest) limited partner in the fund. He directs all of his deal flow to us and we have access to him and his resources. The team and I are responsible for all day-to-day activities such as evaluating deal flow, making investment decisions, meeting business partners and helping portfolio companies at inflection points such as financings and M&A.
Ron focuses on highly-sensitive inflection points – special projects for portfolio companies that have unusually high impact. The SV Angel team and I focus on all other inflection points. We use the following analogy: Ron is the “brain surgeon” and we are the “primary care physicians.” The physician is the point person for all matters and can handle 95% of them. The brain surgeon handles the ‘delicate’ stuff.
We have been using this approach for the last few years and it’s been successful in leveraging Ron’s strengths. I am writing this email because many don’t understand our system and still email Ron only.
Please understand that Ron forwards EVERY SINGLE EMAIL HE RECEIVES to me and the SV Angel team. The only exceptions are those that are highly confidential or sensitive.
If you think it’s urgent, please feel free to cc Ron but keep in mind that we will bring it up to him anyway so ccing him won’t necessarily expedite things.
Also, please keep in mind that he is also very active in philanthropy so he is at full capacity all the time.
To be clear, this email doesn’t mean we are changing a thing. Ron is still as active as ever – as the brain surgeon. But I want to clarify our approach to you so we can continue to provide responsive follow-up and service, which has been Ron’s trademark over his 15 year career as an angel investor.
CONFIDENTIAL – DO NOT FORWARD
Note: This post first went up several hours ago but because of a glitch it disappeared. We’re still looking into exactly what happened.