The 7 Things VCs Should Be Doing for Their Founders Right Now

March 31, 2020 

Dear Venture Capitalist, 

As we enter what will be at least another month of uncertainty and remote working due to the global Covid Crisis, your role as counsel, mentor, and coach to your portfolio Founders has never been more important. Now is the time your Founders need you most, and how you step up in the coming weeks will likely shape your relationship with these Founders, and may mark a turning point in your career. 

While your first instinct might rightly be to shift all of your portfolio companies into “wartime” mode to shore up their financial health -- especially for those firms with high exposure to the current crisis -- we advise being just as concerned for the emotional health of your Founders.

Now is the time for investors to balance logical care for the business with emotional care for the founder. 

As Executive Coaches to dozens of founders and also to many of you, the Venture Capitalists, during multiple market disruptions and downturns over the years, we have seen investor/founder relationships flourish during difficult times like these. We’ve also seen them falter under the pressure. And the difference is most often in how the Investor decided to show up. 

Many of your Founders are first-time CEOs and have little experience managing during difficult times. Some of them are from a generation that has experienced very little adversity. As we wrote in an article on the “imposter syndrome,” behind all the posturing that goes on with Founders is often a lot of unexpressed vulnerability and insecurity. 

Founders are often reluctant to openly share what they are thinking and feeling with their investors. They want to “put up a good front” and yet are feeling vulnerable navigating all the uncertainty surrounding them everyday. This is especially true in this current crisis. 

Now is not the time for Founders to feel like they need to pretend they are “fine” or “killing it.” They need to feel safe to express what is really going on for themselves and their teams, and how you interact with them in the coming weeks will make all the difference. 

After a combined 40 years helping both Founders and Investors weather the downturns and come out even stronger, we’ve come up with seven simple things that you, the Venture Community, can be doing to help your Founders in this time of crisis:

1. Mix The Hard With The Soft at Board Meetings -- Investors will always default to how the business is doing and what measures should be taken to help companies navigate the rough waters ahead. That is mission critical, but your Founders also need you to recognize and support their feelings of uncertainty, anxiety, fear and lack of confidence at this particular time. 

It is important to start every interaction with your Founders with a barometer check on how they are personally doing. In our coaching work, we often begin by asking, “If you could choose one word that describes how you are feeling right now, what would that be?” This practice will give you a good read on where the Founders are making it easier to proceed with the rest of the Board discussion on more difficult business decisions that need to be made. 

Another magical question you should be asking your Founders, not just in board meetings, but every time you chat with them is, “How can I support you today?” You might be surprised what you hear. And if you are only hearing that they are “fine,” you know you have more work to do earning their trust. 

2. Get Them Peer Support -- We see many VC’s currently hosting webinars and “war room” calls where some expert or partner addresses the entire portfolio and hosts a Q&A. We think these efforts are important and will become even more important in the coming days as tough business decisions need to be made. 

However, your Founders are also feeling rather isolated right now, and they want opportunities to share and get support from other Founders. That’s why it is important to get the Founders on a call together … privately. Give them space to support each other. Allow them to create their own Founder support group with a regular cadence for meeting together. You could also hire an outside facilitator or coach to provide some structure to get them talking to each other. 

Our company has hosted a number of these sessions pro bono for the portfolios of a number of the firms with whom we are closely partnered. In these sessions, Founders and CEOs open up, are vulnerable, and provide valuable support and insights into the challenges of their peers. 

3. Send Them One Great Article to Read … not Twenty -- In periods like this, we often see very well intentioned memos circulating with 20 or 30 articles and blog posts that “every founder should read right now.” Unfortunately, this is really not helpful. 

Your Founders are already overwhelmed with too much advice, input, and information. Adding 20 more opinions to that mix doesn’t help them figure out what’s most important. If you do find a real gem to share, please do so. Your job is to help them focus on the one thing that’s most important right now, not to overwhelm them with advice. 

4. Provide Support for Coaching (and not Just Mentoring) -- At Velocity, we differentiate between mentoring and coaching. While this may seem like splitting hairs, the difference is as important as it is subtle. 

Mentoring and the giving of advice is often what Founders find most valuable from investors. Your experience as an investor who has “seen this movie before” is invaluable to Founders scaling their companies. Your advice often gives clarity as to WHAT needs to be done as the company scales, evolves and faces challenges. 

Coaching, by contrast, focuses on the HOW of leadership—how to communicate a tough message, how to have a difficult conversation, how to align a team around a common goal, how to inspire and retain good talent during their one-on-ones, how to facilitate a scenario planning process as the company downsizes.

Research suggests that learning is accelerated when leaders are “feeling the pain” and need to step up quickly in their roles. Now is that time. We recommend that you provide your Founders with coaching or encourage your Founders to continue the coaching they are doing so they get the support they need. We feel we are doing some of our best work at this time and that our clients need us even more.

5. Give Them Something to Laugh About -- This may sound trite, but providing levity in a time of heaviness is something the more “results focused” of us ignore, and often to our peril. This might not seem like the ideal time to send your Founder and everyone on her Exec Team a Unicorn Onesie, but can you actually think of a better time? First Round Capital is known for their hysterical and self-deprecating holiday video. 

What can you and your team do in the coming weeks whose sole purpose is to bring a smile to your founding teams’ faces? How can you elevate their spirits and lower their stress by bringing some levity to an otherwise heavy time?  

6. Remind Them That Self-Care is Part of the Job Description -- In our widely read most recent blog post Leading in Uncertain Times, we reminded leaders that in order to be the “emotional barometer” of the organization, they must remember that self-care is of utmost importance. 

Many of our Founder clients have stuck to a strict regimen of daily mindfulness practices, exercise, walks in nature, etc. Yes, you need your Founders to switch into Wartime mode, but you also need them clear-headed, bright-eyed, and emotionally healthy. Healthy leaders have healthy teams. And healthy teams build healthy companies that can ride out this pandemic. 

What else can you do to remind your Founders that their personal emotional health is as important as (and mission critical to) the financial health of the company? Do they need “permission” from you to take some time off? Do they know you want them (or better EXPECT them) to dedicate time to self-care? 

7. Help Them Reset the Long Term Vision … Realistically -- The faster your Founders switch out of survival mode and back into building mode, the better. Once the survival and transition plan is in place, it’s time to reset the longer term vision and focus. While the pacing of that switch may be market dependent for now, it is critical that you are there to help them make the jump as swiftly and smoothly as possible.

Expecting your Founders to hold to the same plans, the same deliverables, and the same growth trajectories post-Corona may be a recipe for disaster. How can you set a new agenda, a new vision, that is both aggressive, compelling and exciting, while also being realistic given the current environment? How can you inspire them to think big while also taking into account a new reality? 

Through our experience over the years and our daily communication with our clients today, we believe these are the top things you could be doing to provide more emotional support to your Founders. You are the person who believed in them, who invested in them, who dreamed with them, and who has sought to build a better future with them. Now you have all the tools you need to weather this storm with them too. 

If you have additional ideas or questions, we invite you to reach out to us at edward@gainvelocity.com and john@gainvelocity.com. 

We will get through this … together. 

Cheers,

Edward & John