THE VC / FOUNDER

SPLIT

1
Methodology and Big Picture Results
Survey format, participants, and main findings

2
Survey format: questionnaire to Founders and VCs

Most & Least important factors to decide wheth

to partner with a VC or founder
Questionnaire
with questions in
different formats 10 Questions, incl. Perceived frequency of contact
Ratings 1-10, factor ranking,
etc.

Operational support functions offered from VC

Adapted to the
Mirroredquestions
respective
participant ENTREPRENEURS VCs
Same question type, but
Independent answers
adapted to entrepreneur / VC
category

3
Diverse survey participants across VCs and Founders

Voluntary, unpaid
<30m$ Pre-seed to
survey
Disseminated by social media
121 98 to 2bn$+ Series D
and direct contact throughout FOUNDERS VCs AUM Investment stages
H&C network, February and
March 2018

GEOGRAPHIES

4
VCs overestimate the value of their contribution

VCs report weekly

communication 3x more often
than Founders

VC How often do you speak with one of

your VCs or one of your portfolio
Founder
7.0 companies?

5.3 19.0%

58.8%

60.3%
VCs score their level of
“impact and helpfulness” 32% 27.8%
higher than entrepreneurs 20.7% 13.4%
score their own VCs
On a scale of 1 to 10, VCs average self-score Founders VCs
compared to Founders’ scoring their VCs
Once a quarter Once a month
Once a week or more

5
Most Important Factors for Partnerships
Based on rankings by percentage of Founders and VCs rating characteristics as top-three most important criteria for
choosing a VC or investing in a startup
Least important factors for partnerships mirrored the findings for most important

6
Founders rank deal terms and speed more highly

Founders VCs
Personal relationship Personal relationship
& chemistry #1 & chemistry

Deal Terms Brand of partner

Speed Deal Terms

References from General experience

other founders of partner

Network / rolodex Network / rolodex

in the industry in the industry

7
Most important factors for partnering or making investments

Important to Founders Important to VCs

Personal relationship & chemistry Personal relationship & chemistry

Deal Terms Brand of partner

Speed Deal Terms

References from other founders General experience of partner

Network / rolodex in the industry Network / rolodex in the industry

General experience of VC References from other founders

Track record Track record

Brand of VC Operational support

Operational support Investment sector focus

Investment sector focus Speed

Large differences for factors like deal terms, speed, and brand of partner
VCs and Founders value
different factors
Differences are ranked by % of respondents that
reported this as the top-3 most important
characteristic Important to Founders Important to VCs
Deal terms

Speed

Personal relationship / chemistry

Investment sector focus

Operational Support

Track Record

References from other founders

Network / rolodex within industry

General experience of VC / Partner

Brand of VC / Partner

-30% -20% -10% 0% 10% 20% 30% 40%

11
Perspectives: Operational Support Functions Received
vs. Offered by VCs
Founders and VCs checked off which operational support functions they either received or offered

12
Hire-Out vs. Hire-In & Biz Dev Functions

Hire-Out Functions Hire-In Functions

are similar
Founders report receiving slightly
fewer services than VCs offer, but
they are relatively similar
diverge
Founders report receiving less than
half of these services VCs report
offering to Founders, especially for
network-intrusive hiring and sales
functions

Indication of VCs selectivity in

offering these functions only to the
most successful portfolio companies

In which functions does your VC provide you with support?

80%

60%

40%

20%

0%
Finance, legal, admin. Marketing / Growth Talent / Recruiting Sales / Biz Dev
Founders VCs

13
Trends Nuanced Across Geographies and Stages
Founders and VCs opinions differ depending on continent and financing stage

14
Top 5 Differences between USA and Europe (Founders)

Personal relationship & chemistry Personal relationship & chemistry

Focus on VCs’ Focus on
experience, General experience of VC Deal Terms deal terms
brand, and Perhaps because
European startups are
operational Speed Speed less dependent on
financing for
support operations, as they are
May indicate a premium Operational support References from other founders
more often
US startups place on bootstrapped and cash
signaling through the VCs flow positive
Brand of VC Track record
they choose to work with

Both share personal relationship / chemistry and speed as first and third most important
Top 5 Differences between USA and Europe (VCs)

Personal relationship & chemistry Personal relationship & chemistry

Brand of Partner Brand of Partner

Deal Terms Deal Terms

Network / rolodex within industry General experience of Partner

General experience of Partner References from other founders

European and US VCs share 4 of the top 5 most important characteristics

Factors ranked differently were separated by only a few percentage points

Top 5 Differences between Stages (Founders)

SEED STAGE – SERIES A SERIES B – C STAGE

Personal relationship & chemistry Personal relationship & chemistry

Deal terms Deal terms

Speed General experience of VC

Network / rolodex within industry Track record

References from other founders References from other founders

Personal relationship/chemistry and deal terms are consistently ranked the highest

Speed is more important for Seed stage and Series A than for Series B – C deals
Top 5 Differences between Stages (VCs)

SEED STAGE – SERIES A SERIES B – C STAGE

Focus on deal Focus on
terms and experience
Personal relationship & chemistry Personal relationship & chemistry
industry and track
network Brand of Partner Brand of Partner
record
Indicates early stage May indicate a focus on
companies have less execution of growth
negotiating power compared Deal Terms General experience of Partner strategies
to VCs

Network / rolodex within industry Track record

General experience of Partner Operational support

Both share personal relationship / chemistry and brand of partner highest

Appendix

19
Most Important Attributes for Founders & VCs – Slides 7 – 10
Most Important Attributes for Founders & VCs Founders
80% VCs
% of Respondents with Attribute in Top 3

70%
60%
50%
40%
30%
20%
10%
0%

20
Least Important Attributes for Founders & VCs – Slide 7 – 10
Least Imporatant Attributes for Founders & VCs Founders
VCs
60%
% of Respondents with Attribute in Bottom 3

50%

40%

30%

20%

10%

0%

21
Support Function Perspectives – Slide 13
Support Functions Performed by VC, as Perceived by Founders & VCs
Founders
80%
VCs
70%
% of Respondents by Founder & VC

60%

50%

40%

30%

20%

10%

0%
Talent / Sales / biz dev Finance, Marketing / Engineering Design None Other
recruiting legal, admin, Growth
etc.

22
Ranking Differences Across VC AUM Size is Minimal

AUM <$300 Million AUM >$300 Million

1 Personal relationship / chemistry 58.3% Same Personal relationship / chemistry 76.0%

2 Brand of VC / Partner 48.6% Same Brand of VC / Partner 68.0%

3 Deal terms 41.7% Close General experience of VC / Partner 32.0%

4 General experience of VC / Partner 34.7% Close Deal terms 24.0%

5 Network / rolodex within industry 30.6% Same Network / rolodex within industry 20.0%

6 References from other founders 27.8% Close Track record 20.0%

7 Track record 22.2% Close References from other founders 20.0%

8 Operational support 18.1% Close Investment sector focus 16.0%

9 Investment sector focus 15.3% Close Operational support 16.0%

10 Speed 9.7% Same Speed 8.0%

23
 European vs. US Founders – Slide 15
European Founders (n=75) USA Founders (n=37)
70% 60% 50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80%

Personal relationship/chemistry Personal relationship/chemistry

Deal terms General experience of VC / partner

Speed Speed

References from other founders Operational support

Track record Brand of VC / Partner

Network / rolodex within industry Investment sector focus

Operational support Deal terms

Brand of VC / Partner References from other founders

General experience of VC / partner

Network / rolodex within industry

Investment sector focus Track record

24
European vs. US Founders – Abs. Differences – Slide 15

Attribute Abs Difference % Greater Importance For:

1 General experience of VC / partner 19.1% USA

2 Operational support 9.2% EUR

3 Track record 9.1% EUR

4 Personal relationship/chemistry 7.6% USA

5 Network / rolodex within industry 7.1% USA

6 Speed 5.0% EUR

7 Deal terms 4.6% EUR

8 References from other founders 3.7% EUR

9 Brand of VC / Partner 3.0% USA

10 Investment sector focus 2.9% USA

25
 European vs. US VCs – Slide 16

European VCs (n=45) USA VCs (n=44)

70% 60% 50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70%

Personal relationship / chemistry Personal relationship / chemistry

Brand of VC / Partner Brand of VC / Partner

Deal terms Deal terms

General experience of VC / Partner Network / rolodex within industry

References from other founders General experience of VC / Partner

Network / rolodex within industry Investment sector focus

Track record References from other founders

Operational support Speed

Investment sector focus Operational support

Speed Track record

26
European vs. US VCs – Abs. Differences – Slide 16

Attribute Abs Difference % Greater Importance For:

1 Speed 13.7% USA

2 Investment sector focus 11.6% USA

3 References from other founders 10.7% EUR

4 Deal terms 10.4% EUR

5 Network / rolodex within industry 9.6% USA

6 Track record 8.6% EUR

7 Personal relationship/chemistry 5.3% EUR

8 Brand of VC / Partner 3.3% EUR

9 General experience of VC / partner 0.7% USA

10 Operational support 0.4% USA

27
Early vs. Late Stage Founders – Slide 17
Early Stage Founders (n=113) Late Stage Founders (n=8)
80% 70% 60% 50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80%

Personal relationship / chemistry Personal relationship / chemistry

Deal terms Deal terms

Speed General experience of VC / Partner

Network / rolodex within industry Track record

References from other founders References from other founders

General experience of VC / Partner Speed

Track record Brand of VC / Partner

Brand of VC / Partner Investment sector focus

Operational support Network / rolodex within industry

Investment sector focus Operational support

28
Early vs. Late Stage Founders – Abs. Differences – Slide 17

Attribute Abs Difference % Greater Importance For:

1
Brand of VC / Partner 22.6% Late
2
Deal terms 14.8% Late
3
General experience of VC / partner 12.7% Late
4
Speed 11.8% Late
5
Network / rolodex within industry 8.7% Early
6
Track record 7.9% Early
7
Personal relationship/chemistry 7.7% Late
8
Operational support 6.1% Early
9
References from other founders 5.2% Early
10
Investment sector focus 3.8% Late

29
Early vs. Late Stage VCs – Slide 18
Early Stage VCs (n=66) Late Stage VCs (n=31)
70% 60% 50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80%

Personal relationship / chemistry Personal relationship / chemistry

Brand of VC / Partner Brand of VC / Partner

Deal terms General experience of VC / Partner

Network / rolodex within industry Track record

General experience of VC / Partner Operational support

References from other founders Deal terms

Track record Investment sector focus

Investment sector focus Network / rolodex within industry

Speed References from other founders

Operational support Speed

30
Early vs. Late Stage VCs – Abs. Differences – Slide 18

Attribute Abs Difference % Greater Importance For:

1 Network / rolodex within industry 17.2% Early

2 Operational support 16.9% Late

3 Deal terms 16.6% Early

4 References from other founders 14.2% Early

5 Personal relationship/chemistry 11.9% Late

6 General experience of VC / partner 11.6% Late

7 Track record 10.9% Late

8 Speed 8.9% Early

9 Brand of VC / Partner 6.5% Late

10 Investment sector focus 1.0% Late

31
Thank You. 💪 👊