Monday, January 3, 2011
Challenges Juggling the MBA-Friend and VC Firm-Allegiance Roles
There’s such hunger amongst the HBS graduate population to start companies that suddenly being on the VC side of the table presents tricky situations with classmates. Section friends start pitching you their startup ideas, and they’re just as (un)likely to be investable ideas as the rest of the startups out there. Juggling the HBS-friend and VC firm-allegiance roles is not easy. You want to be honest with friends, and you want to encourage their entrepreneurial aspirations, but it’s hard sometimes to balance telling friends how cool their ideas sound with the reality that they’re not cool/ready/big enough for you to go to bat in front of the general partnership on their behalf.
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If you think it's a bad idea, I think you just have to be straight up with people.
ReplyDeleteAnd if it's not, what better than investing in someone you trust and have rapport with? To the extent that you can separate a personal relationship from assessing the business (that's the problem I find, it clouds judgement), investing in people you are familiar with takes a big risk off the table... influence/team.
I agree with the first commenter, but the reality is that people are going to take a no personally. The very fact that you have a relationship will make the person more upset with a negative answer. When you don't know a person, and they turn you down, you can mentally think they don't know what they're talking about. But when it comes from someone you respect and are friends with, they don't have that luxury.
ReplyDeleteAnyway, VCs never say no, so having a personal relationship makes us even less likely to give a definitive, negative answer.