For fundraising success, forget the firm + focus on founder / partner fit

Phin Barnes posted this morning on his working style with founders in his portfolio. Phin is one of the founding partners in the wildly successful early-stage VC firm First Round Capital, and – as is often the case in media coverage of the VC business – his personal brand and the firm’s brand are often conflated. Founders seeking VC often make the same mistake, focusing on raising capital from an entity (the fund), rather than a thinking about the set of individuals that make up that fund’s partnership.

This misattribution is easy to make, but it’s also one of the biggest blockers to fundraising success, especially for first-time founders with limited experience dealing with early-stage investors. No matter what the fund’s decision-making process (as one example, Hunter Walk at Homewbew – another fine early-stage fund, recently shared a thoughtful post about his firm’s methods, and how they differ from other firms he works with), no VC investment consideration is advanced without a “sponsor” – an individual partner who leads the investigation and ultimately champions it to her partners at decision time.

Because VC partnerships are usually small – usually fewer than 10 investing partners, and often as few as two – it is a categorical mistake to engage with a fund as a “company” (defined here as an entity that makes predictable decisions based on an established, anonymized process). Instead, successful founders focus on “partner/founder fit” (as Phin describes), making a personal connection with an individual human whose values, worldview and idiosyncratic style are the strongest possible fit with your own needs as a founder and CEO. (As the recent and accelerating cascade of sexual misconduct disclosures has revealed, this includes filtering for fit on behaviors and attitudes way beyond the professional).

Fortunately, this is easier than ever: unlike the early years of venture, when firms were famous for their fortress-like inaccessibility, venture firms and investing partners now compete to outdo each other in transparency, projecting their ideas and opinions on personal blogs, newsletters, social media platforms and (most recently) podcasts. In addition, public databases like Crunchbase make it clear not only which firms made which investments, but (usually) which partner led the deal – the strongest possible indication of their interests as an investor.

When working with portfolio founders on their next raise, the first thing I ask them to do is build a list of stage-appropriate investors – not firms, but individual partners – that have: (1) demonstrated recent interest in their category based on related but non-conflicting prior investments, and (2) revealed an investing approach and worldview that aligns with their own, based on the investor’s public statements, social media persona and word-of-mouth from fellow founders. If the founder comes back with a list of target firms rather than specific investors, I ask them to dig deeper – and will hold off making intros – until they’re ready to start reaching out to investors as human beings, not just logos and bank accounts.

Not surprisingly, I take the same view of inbound meeting requests from founders interested in working with me: if they’ve taken the time to unpack what I do and how I think based on my long public crumbtrail of investment decisions and published views, I’m always happy to engage (even if they don’t have a warm intro). But if it’s obvious that I’m an entry in a generic list of investment “targets”, my default response is a polite “not a fit” email. (This is particularly true for inbound from professional fundraising firms, which I routinely ignore and often block as repeat offenders).

Raising VC is really hard, but your odds of success go way up if you seek out investors for their strengths and differences as human beings, not the logo on their door or the cash in their account.