When I got into the VC business in the early 80s, the VC/Company relationship was pretty different than it is now.
Capital was hard to come by, VCs commanded terms that would be laughed at today, and once they had made the investment, VCs acted as if they owned the Company (they sometimes did).
The VC/Company relationship was a lot more like the current PE business than the current VC business.
Back then VCs thought their customers were their Limited Partners. They would put on lavish annual meetings, treating their investors to three day events at resorts and such.
Capital was hard to come by for VCs too and so they worked hard to earn the favor of the capital suppliers.
All of that changed, starting in the 90s, when capital became very easy to come by in the first Internet boom.
When we started Flatiron Partners in the mid 90s, I told my colleagues that our customers would be the entrepreneurs and that I wanted to treat our investors as our shareholders.
That was a novel idea at the time, but I have advocated for it ever since and I think it more properly captures the relationship that the best VCs have with their portfolio companies today.
Our portfolio companies are our customers.
At USV, we have a portfolio network of about seventy companies. This group spans 8,000+ employees across more than 10 countries and 20 cities.
We have a dedicated team that services our portfolio and as we have built it, we have been guided by several principals which reflect this “customer” orientation.
We put them up on our website yesterday, they are here.
Go read them and you will see that they reflect the fact that we are here to support our portfolio, not the other way around, we view them as our customers, and their success is our success.
I believe this is as it should be.