An LP I know was shocked–shocked!–to learn that VC board members aren't actually correcting their portfolio companies when they go astray. Here's why...
LPs (Limited Partners) are where the VC's money comes from. They are either wealthy individuals, or also professional investors (fund of funds, endowments, pension funds, etc).
VCs pitch LPs on their "value add" and uniqueness, just like any other pitch.
And just like any other pitch, a lot of it is marketing fluff. Here's the translation.
"We find the best companies through our unique deal flow" = we go to YC demo day and overpay like everyone else. Also, we reach out cold on angel list.
"We are active investors who help founders find great talent" = we have an email list we blast from time to time about full time roles, and a handful of fractional people we recommend.
"We are helpful board members, guiding our founders to successful exits" = we show up to board meetings and sometimes read the packet. But we'll never tell a founder/CEO no because we don't want a bad reference for future founder/CEOs.
"We help founders maximize their exit" = If they're wildly successful, we introduce them to investment bankers that would have been happy to meet with them anyway, and then sign the papers. If they're not successful, we send a few emails and cross our fingers.
Kinnevik (Secondee) / Senior Associate @ Orrick - specializing in Venture Capital and Growth Equity
4moHuge congratulations MMC Ventures team!