How entrepreneurs should engage venture capitalists

welcome my name is sanic bazooka I'm an assistant professor at insa in the Entrepreneurship department today with us Randy Komisar senior partner at Kleiner Perkins welcome oh thank you thank you for having me Annie if I'm a CEO of a venture venture bus company how do how do kind of companies succeed in leveraging you the most or kind of in leveraging a venture capitalist the most I mean you get the money but you get much more than the money so how how do you get the most out of this relationship we like to think that we bring value to every deal in addition to the dollars and in fact I would say that the least valuable thing we bring to a transaction is the money the money is a commodity particularly in a place like Silicon Valley in many plates of places on the planet venture capital is still very scarce but in San Francisco area is there's a surplus of capital so we need to bring value and the value that we bring really is at the board level in helping to develop the talent of the founding team and also to help in the running of the business you know we have a lot of experience in pattern recognition that comes through years and years of seeing different problems and solving different problems and so anticipating those problems and being able to help our founders and CEOs anticipate those problems is a big part of what we bring to the table our network is very important so being able to make the introductions to key employees they may want to recruit or two partners that they may want to work with or their customers that's a big part of what we do but I think a lot of what I do given my experience having been a CEO numerous times is helped the founder to develop as a CEO to help them to achieve their potential as a leader in the company and be a confidante for them as they run into problems in building the business and of course in venture capital from the day you invest you run into problems helped me to take the tell me to take the perspective the CEO in for a second so I'm the CEO you are the venture capitalist how how do I engage you in the best way what's my way of to benefit from you well is it good to have an agenda of things so for instance what I do is I set up meetings where weekly or bi-weekly I actually have either a phone call or a sit-down meeting with the CEO and and I encourage them to come in with a clear agenda on the things that they want to talk about some of my CEOs do better with that than others some do a free-form discussion but many of them will walk in with actual agenda of items that they want to discuss those items may not relate specifically to the running of the business they may relate to issues that they're having in terms of their own ability to leave they may run into issues of their own personal health and balance I have I have four CEOs who I help guide around health and wellness in addition to to running the business you really do become a close friend to these people and and a senior confidant just through years of experience elaborate a little bit on this kind of what other what are the the channel you see you would have thought like oh we help them with kind of product marketing and we have them with financial terms and but this seems a much richer relationship can you if you look at cross kind of the people you're working with what are kind of their main their main challenges when you are in these positions you know again you have to go back to my filter since I'm choosing people I share values with that means they share values with me and so we create a relationship from the beginning that's much more than simply investor and CEO and over time particularly as they see me support them even in rough times even while I may be critical of their of their performance they understand that I am there for them that I am thinking about their best interests that it's not simply about my maximizing my return they begin to create a different relationship with me where we can talk about the things that concern them sometimes it's health issues sometimes it's how they are going to be able to manage the endurance of a series of Sprint's of building their business together how are they going to build career when in fact they've got the stress of the day-to-day bearing down on them these become the critical questions for these CEOs there's a very lonely job in these companies and and you have to remember that a lot of the people I'm working with may never have actually run anything before they may never even manage to run a division before they may be the first time they've done anything where they've had to lead other people and they need people to confide in they need people to talk to they can't talk to their team they can't talk to most of their board members because most of their board members they have a employee-employer relationship with and many of their board members nowadays you see in Silicon Valley most of these investors they've never run anything they don't have the experience they don't have the life experience or the career experience to be able to guide these people on it so they find it I think a very productive relationship to be able to have a confidant relationship with somebody who yes may be a board member but first and foremost is there to help them be successful now for them to be successful I may guide them out of the company I may guide them into a different role if I feel like it is they're not doing themselves or the company a service I may guide them through that but I will guide them through that they know that I'm going to be there to do that for them in a supportive way not to come in and simply be in judgment of them without actually helping them to be better I wonder as you teach and in university what are the things you hope people who people get from that experience it's such a great question you know it's one of my one of my criticisms of a place like Stanford nowadays because the Stanford now has become a majority I think in the engineering in the computer science program let alone the engineering program it's beginning to look more and more like a pre-professional school and I believe that the opportunity on campus the moment the opportunity to to walk away from the outside pressures to come back to learn to open up to learn about yourself to learn about the topics to learn from others to rub up against the world is a precious precious moment and to waste that moment learning skills that you're simply going to apply later seems to me to be a great loss of an opportunity because an education is much bigger than learning a set of skills or set of tasks or becoming an expert it's about broadening yourself it's about broadening your worldview and it's about learning from those around you not just from textbooks not just from case studies what I what I encourage my students to do is to take that time very very seriously and have the confidence that they can always put together the skills that they'll need later for the careers that they decide to choose in a world like the one that our students are now going into very few of them are going to be in a linear path most of them are going to have to reinvent themselves every two three four five years reinventing yourself means that the skills that you learned before are probably not the skills that are going to be the key to your success in the next phase of your views of your career as a result learning how to learn learning how to manage your emotion ality through various different phases and difficulties learning how to influence and work well with others becomes more important than a particular set of skills so I think that the service that we do as professors with our students is to make them appreciate that moment and give them license to try things to fail to open up and learn things about themselves and others that they will otherwise never have another chance to do thank you so much this was a great this was a truly great pleasure thank you for inviting me INSEAD is a fantastic experience I've really enjoyed it and I'm looking forward to tomorrow and thanks for this discussion

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Length: 9min 13sec (553 seconds)

Published: Sun Oct 16 2016