I have had several tech operators that I would love to bring on as a partner at DWP Capital. They are knowledgeable people with great instincts and would be fantastic capital allocators. However, they all have said the same thing that has given me the reason not to pursue the relationship.
“I want to work with founders. I don’t want to be on the sourcing and fundraising side.”
Although the most satisfying, working with startups is the least important piece to the puzzle of being a great investor. If I were to rate the level of importance of activities done by a minority investor, it would be the following:
Fundraising
Sourcing
Portfolio Support
Everyone wants to feel what I call “the startup high.” They like to be close to the game and the founders because, let’s be honest – it is exhilarating. It’s incredibly fantastic when you provide them some value and make them feel like you are “a part of the team.”
However, to get to that prize, a lot of work must go into it. First, you need to convince people that you can find the right deal for them to return capital. Then, you need to listen to pitches to understand what is a “good deal.” This takes time, grit, rejection, and, dare I say…work.
Wanting to be a VC to work with founders is like saying you want to be a mountain climber, but you’d take a helicopter to the summit for the view.
