Why Don't More Emerging VCs Have Coaches?
Being a VC means not only honing your skills as a judge of character, assessor of business models, and calculator of risk, but it’s also a lot of difficult interpersonal communications, narrative creation, and long-term goal setting and positioning.
While some of the hard skills and prerequisites to do the job can be taught by those around you with more experience, the latter activities often have to be figured out in a way that is extremely tailored to you as an individual—so it’s just not going to be the same for everyone.
To me, it’s exactly the kind of thing that the feedback and perspective of a coach is great for—but I don’t see a lot of investors making the investment in getting a coach. Given how much it helped me, I wondered why—especially as I’ve begun to take on a limited number of coaching engagements. (Drop me a line if you’d like to inquire.)
Did I take advantage of a coach early on? I did!
When I joined First Round Capital, I started off with a bang.
I signed my first deal within 100 days of joining the firm and closed three more deals that summer. It felt like every single time I walked into the partner meeting, I was bringing in another deal—which was great because I was trying to get noticed.
You see, I was hired on a temporary basis to help plug the firm into NYC’s ecosystem, but I was told from the onset that there were no paths to staying on. We had three other Principals waiting for perhaps one Partner slot to open up and so it was basically written in stone that I was moving on.
Still, I decided I was going to make myself indispensable by any means necessary.
It was that latter part—the “by any means necessary—where I became a bit of a bull in a china shop. I rubbed some partners at other firms the wrong way when I got overly combative over getting deals when I should have been more collaborative. I was also making some brash public statements that won me points with some founders but irked my teammates who didn’t really feel like I was repping our firm appropriately.
Oh, right. The firm. I was no longer the CEO of my startup. I was part of a team and I was forgetting about that on my way to trying to stand out as an individual.
To navigate this tightrope, I sought out the advice of a coach—Jerry Colonna.
Jerry had been my former boss Fred Wilson’s partner at a previous firm, so he was uniquely familiar with what it meant to be a VC, who the players were, what the pressures were, etc. Our first conversation was like starting out on the fifth date. We got right into it and he wasted no time in helping me get to the root of the things that were both strengths and weaknesses and how I might recognize how to wield them appropriately and to my professional advantage.
So why don’t more investors take advantage of a coach’s help? We act as coaches all the time to our portfolio founders and often recommend coaches to them without hesitation they’ll find value in the relationship.
I spoke with a few people and here’s what I figured out:
First off, there’s the cost.
There are some coaches out there charging $500 an hour or asking for a monthly retainer in the $1000’s. That’s out of the question for a typical Analyst or Associate salary. Even Principals might have a hard time with that—especially given what I see about their own cost structures. I feel like non-partner professionals tend to live in the very heart of the cities they work in, often paying up for very central locations and buildings with amenities so they can optimize their time around networking instead of commuting.
Decent salaries can turn into ramen cash flows very quickly after SF/LA/NYC rent is taken into consideration.
I get that, but it still seems like rather short-term thinking not to figure out a way to create budget for a couple hundred bucks every now and then for a conversation that could alter the trajectory of your career—a career solely focused on getting to one of a very limited number of partnership positions.
If you’re in this industry then you’re in it to make partner—so wouldn’t any advantage you could get be worthwhile to invest in, within reason? That’s especially the case if you could perhaps shake loose folks who aren’t building their whole persona around being a very expensive coach. There are lots of people who do coaching just to cover some overhead while they work on other projects or because it “keeps them in the game”—or perhaps just because they just really like it.
For them, getting paid is a way to get a commitment from a client—and it’s honestly just the right thing for someone to get paid for their time—but they’re able to be more flexible than you think. Plus, many firms will give their investors professional development budgets or would consider paying or at least subsidizing coaching costs—since it’s ultimately to their benefit to have better-coached people.
Another factor is that Partners at firms will often make themselves available for deal-related questions—so there’s actually a fair amount of education going on. Junior folks might feel attended to—but education isn’t really coaching—especially when the other people at your firm are inherently conflicted.
Let’s talk about that reality for a moment.
You’re all competing for a finite pool of carry and the attention of a seemingly limited number of great deals.
Is the partner whose name is on the front door going to help coach you on how to become the most valuable asset the firm has?
Sometimes, yes. In the long term, that’s to their advantage if they’re thinking about generational transition and the future of their firm.
In the short term, however, any more carry going your way—which you’re certainly going to demand when you start bringing in great deals—is going to come out of their pocket. Also, some partners are notoriously stingy about sharing fund economics—and the industry very quickly finds out who those firms are. Those are the ones that constantly seem to be throwing off (losing) high-quality investors.
Plus, if they’re still active, these investors are still going to want as much visibility coming their way as possible—so your public wins may be coming at their visibility expense.
To put it another way, they’re going to be psyched when you just crack the Midas list at #100 but how are they going to feel when you rank higher than them, or bump them off the list entirely?
Some partners will be thrilled, but perhaps not everyone—and it’s in those circumstances where a coach might be helpful in helping you navigate being “Firm First” while creating much-needed professional visibility for yourself.
Plus, not everyone who is successful is actually good at coaching. I’ve worked with some successful people whose advice was always some version of, “You should do what I did.”
Sure, that’s worked out incredibly well for them, but if you’re nothing like that person and you bring a totally different skill set and perspective to the table, what good is that advice? Also, maybe you don’t have the same definition of VC success. Maybe a big team isn’t your thing or you don’t really want to do early stage.
Plus, the world is very different today than when many VC partners started—in Pre-YC worlds of $3mm Series A’s, before mobile, before crypto, before AI, etc.
One of the reasons I’m doing a few coaching assignments is that investor education and support is an area I'm very interested in. For the past few years, I've been running #newtovc, an educational forum for accredited investors and non-partner VCs that skew, not exclusively, but intentionally towards professionals with diverse backgrounds. (Check out our conversation on "Micro to Institutional" with Aaron Holiday and Kirsten Green.)
In addition to running educational events, I've built a diverse portfolio at Brooklyn Bridge Ventures...
...and have written extensively on representational issues.
Making sure that the next generation of investors is far more representative of the population at large than the current one is really important to me--but that won't happen unless we support the handful of folks that are already here, and do everything we can to make them successful.
If you know anyone at the early stages of their investing career or folks who are looking to break in that are part of the startup ecosystem as scouts, mentors, etc. who would benefit from coaching, please put me in touch.
I'm happy to connect for free over a 1:1 intro call to chat about what it means to make an investment in coaching and help them think about how I could be helpful.
