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CEOs are from Mars, VCs are from Venus – redux
Back then we cited a joint study conducted by the NVCA and Dow Jones which outlined several factors that contribute to a good long-term partnership for long-term growth, and highlighted two data that we found insightful band mildly humorous:
Do you respect me or my money?
- 54% of VCs cite mentoring the CEO as a critical value-add; only 27% of CEOs see the value.
- 64% and 34% of CEOs see the ability to complete follow-on financings and facilitate exits as top value adds; VC numbers were 48% and 22% respectively.
The money will always be important. After all, entrepreneurs should pick a financial partner who can provide additional capital as needed as their companies grow. But the best (sadly, not all) venture partners provide much more than money – valuable contacts, “been there, done that” experience when facing tough business issues and a sympathetic sounding board for entrepreneurs working under great pressure.
As was the case with another contributor at a different publication, the author of the Entrepreneur piece is either subconsciously thinking mostly about early-stage venture financing or is perhaps painting with too broad a brush. But he still makes a few valuable points:
Ultimately, Gray’s [author of the 1992 book Men are from Mars, Women are from Venus – ed] advice for better relationships applies: If founders and capital providers invest the time to understand their objectives deeply, they will have a productive relationship. The key is to find activities where they can make the other party better off.
Or, if you prefer, as we once put it in The fate of control (also from 2009):
It’s more about chemistry than control. How you react during the inevitable challenges of building a business together will define the relationship. Over time you learn to play to each other’s strengths and make the concessions and adjustments that a given situation demands.