Building a Team through Investors

One of the axioms of raising capital is simple: all money is green, so what is the value an entrepreneur should expect from an investor?

For many early-stage companies that are growing quickly, with money safely in the bank, the primary need is talent.  And one of the resources that any venture capitalist should bring to the table beside money is a large network of connections to help and entrepreneur find talented people for specific roles.

Union Square’s Fred Wilson suggests five simple rules for leveraging investors to grow a entrepreneurial team.  It’s an excellent post, with both broad and specific advice.  Here is our favorite (which is good counsel for interacting with board members of any organization):

Rule #2 is to be very specific about what you want and request help in frequent small asks. One of our portfolio companies that I am actively involved with sends me an email each week with up to three specific asks. No more than three. I can do three each week. What I can’t do is a vague open ended request once in a while with a very large ask.

The relationship between investor and entrepreneur, between board member and CEO, is constantly shifting. Many entrepreneurs (who often chafe over reporting to any authority — which is also often why they are successful entrepreneurs) spend time creating distance from their investors and board members, only to suddenly parachute in with a big “ask”.

Wilson’s post is a clean reminder both that there must be a clear line between investor and entrepreneur, and that each side can, in the right circumstances and structure, provide significant value.  And when choosing your partners on either side of that line, it should never be just about the money.