It’s somewhat rare to see a truly value-creating relationship between a founder and their investing partner. Many times (and I’ve been guilty of this myself), the relationship becomes infrequent, hands-off, pro forma and/or tactical, rather than a needle-moving and open partnership.
During Extreme Entrepreneurs (EE), I rediscovered the value of relationships and substance. I’m already applying these in my interactions with founders.
Extreme Entrepreneurs is a program we hosted recently in Bangalore. Eight founding teams (picked out of 450 applicants!) spent seven days with us, spread out over seven weeks. Each EE day was spent in masterclasses with industry leaders, clinics to refine specific functional skills, simulations and office hours with a partner.
In the beginning, founders and partners alike were all a little bit apprehensive and tentative. Pretty soon, we got beyond marketing to each other. This was magic for the relationship. We were more vulnerable and open and kind to each other. When we removed our investor and founder “labels” and engaged truly as partners, there was an openness and authenticity that was powerful, refreshing and efficient.
We tried to not be judge-y on everything the founders said. If we were always judging and assessing, then we could not expect founders to be fully open. We had to create the conditions for openness by being human and transparent, in addition to being open to push back and criticism.
While it might sound obvious, it helped to have a weekly back-and-forth dialogue, rather than having a dry once-a-quarter one-way presentation of facts and figures. The more time founders and partners spent on this continuing dialogue, the more productive our relationships were.
It took a couple of weeks for the EE teams and us to get into the rhythm of office hours. At the beginning, we all went too broad — talking about the whole business and experiences leading up to the founders starting up. In some sense, this was necessary so that we could come up to speed but it did not help the founders move the needle per se.
Something changed after two weeks. Founders got a lot more specific in their demands. They came to each office hour with a specific list of questions to tackle: identifying needle-moving milestones, adjusting market focus to open up a larger TAM, focusing product roadmaps on strategic leaps rather than table-stakes, getting lighthouse customer introductions, reviewing financing decks, tightening up messaging and positioning, and more.
Partners benefited by hearing founding teams’ problems and upcoming decisions, rather than trying to gauge reality through the veil of a perennially rosy narrative. Founding teams benefited by engaging with us on strategic areas that may lead to high impact, rather than low-value reporting and airtime.
It helped to keep our pre-investment hat on and expose the founders to questions that new investors might ask in a future round — this was not so much about any future financing — rather, this was about using these questions to understand and optimize the business being built.
We also hopefully helped founders “see around corners” by talking about high impact problems that might pop up in the next 1–2 years that they could start thinking about ahead of time and proactively addressing. In the hustle and bustle of daily execution, founders and partners have many times lost sight of these bigger questions that needed to be tackled.
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