Happy official New Year’s, all. It’s that time of year where we think about new beginnings.
And there’s none that makes me happier than to announce that Jordan Hudson has been promoted to a Principal at Upfront Ventures. Please help me congratulate him by Re/Tweeting this post (and following him if you don’t already).
I thought this was a good chance to talk about what Associates at VC firms actually do and define what on Earth a “Principal” is.
What is a principal at a VC firm and how does it work at Upfront Ventures?
Most firms have “associates” and “partners” and some have an additional role called a “principal.”
Associates have different functions at different VCs. Usually there roles are a combination of:
Deal sourcing for partners
Deal support / analysis / quant / legal for deals a partner is seriously considering
Portfolio company support & analysis
Portfolio community building
VC firm admin
VC firm policy or fund analysis
Helping be the VC “presence” at key events
And so forth.
Associates often shadow partners at board meetings so that they can help follow up with the company on important initiatives between board meetings. I’m a proponent of this (provided the associates stay silent during board meetings) because it gives the VC firm leverage and provides and extra set of eyes & hands to help support the company. Smart founders use this extra resource to their advantage. Just ask
I’ve written a few posts about boards recently as part of a series on the subject. I should note that my friend Brad Feld has written a new book on the subject that I would recommend if you want the bible on the topic. I admit that I haven’t yet read it but I’ve had numerous discussions with Brad over the years about board structure & conduct and consider him a mentor on the topic.
In the Early Days
When you first start your company and raise initial venture capital your board probably consists of 1-3 founders and 1-2 VCs. The main thing you’re concerned about in this phase of your company is maintaing control of your board, which in a legalistic perspective is ensuring that founders & management have the majority of seats on the board.
Most experienced VCs won’t push you to give up founder control at this stage of the business nor should they.
Yesterday I wrote a post about “the politics of startups” in which I asserted that all companies have politics, which in its purest sense is just about understanding human psychology.
I think as a tech industry we have bred a culture that places more emphasis on product excellence than managing human behavior. Of course it makes no sense to have great people management and a crappy product. But I would posit that in order to sustainably build great products in an intensely competitive industry with skills shortages – people management is one of the most critical soft skills organizations need.
I think it’s what Sheryl brought to Facebook when the young Mark Zuckerberg lacked in terms of his age, maturity and probably his lack of inherent people management skills by that phase of his life. The lack of team cohesion and respect for individuals has probably been one of the biggest weaknesses of Zynga – at least from nearly EVERY employee I’ve ever talked to who worked there.
Many startups these days are started by young, technical or product founders who are in the idealistic phase of their lives and careers.
Thus I hear many talk about “radical transparency” when virtually every experienced operator in my inner circle talks knowingly about that naiveté. It’s not that I don’t love idealism – I was young once, too! – it’s just that the more experience you get in your career the more you come to realize certain truths.
One of the most common refrains I hear is, “I want to have a company with no politics. You know, no bullshit.” Ok, I ad-libbed the last bit.
But there is no such thing as “no politics” since we’re human beings and we’re genetically wired for politics. It’s called social interaction and understanding peoples’ motives, what makes them tick, who they don’t get along with, what rivalries exist, etc. is a very important part of being a leader.
It’s why I wrote a post outlining why
One of the questions I’m most often asked by CEOs is how to hire sales people.
I’ve written a lot about recruiting and hiring at startups including my controversial post on whom not to hire and my rapid response to the flame war. I’ve also written extensively on sales and on which sales execs to hire and how to think about the different kinds of sales leaders.