Jeff Bussgang of IDG Ventures wrote an interesting article this week about the venerable VC Monday Morning Partners Meeting. As a serially-offending entrepreneur, I’ve had plenty of VC meetings over the years and thought I’d expand on one of the important comments Jeff makes about closing or pre-closing the other partners in the firm.
Entrepreneurs thus need to be careful to think through how to sell an entire partnership on their opportunity, not just the sponsoring partner. Get to know each of the decision-makers before the meeting and draw out their hot-buttons. Don’t be afraid to ask for direct meetings with a subgroup of the partners to try to win them over.
It is worth noting that, generally speaking, sponsoring partners do not bring companies into Monday Meetings capriciously. You should not be afraid to ask for these meetings, and you should ask, of course, but in sincere situations, based on my experience, the sponsoring partner will generally work hard to facilitate these meetings with minimal nudging on the part of the entrepreneur.
It should give you pause for thought if the partner says they are interested in taking your deal to the partners meeting, but is not actively helping you meet and pre-close the other partners. That is fairly illogical behavior if their ultimate goal is to participate. There are exceptions to every rule of course, and small firms of 2-3 partners surely behave differently than firms with a dozen partners.
First, unless the firm is run by a single managing general partner who makes the ultimate decision, all decisions are typically made as unanimous, consensus-driven. This means anyone can veto a deal if they don’t react well to it.
Jeff qualifies his statement with “typically”, and that is certainly appropriate. Do keep in mind that every partnership is different. It is your job as the entrepreneur to learn how that partnership works so you can plan optimally. Ask the partner you’re dealing with. Find an LP or two to talk to. Connect with independent Directors who serve with the firm’s partners on company boards. Seek out other entrepreneurs the firm has funded (or perhaps even better, firms that didn’t make it beyond the Monday Meeting).
It might be a cliché, but as Sun Tzu suggested, all battles are won or lost before they are fought.