Establishing Trust as a VC

There are a lot of relationships that would be a little weird if they hadn't become commonplace--the kind of thing where someone raised by wolves might not adjust to so easily.  A waiter requests money from you at the end of a meal, a doctor looks into your open mouth, and demanding strangers get into your car if it's yellow and has a number on the roof.

One relationship that isn't so commonplace is having a venture capital investor--especially for the first time.  There are a lot of things that a VC does that might feel intrusive--asking to be on your board, going through your financials...  I mean, didn't they say yes to your pitch?  Why are they doing due diligence all over again--every month?? 

Of course, as investors, we know why we do these things--but do we ever take the time to explain it to our founders?

Perhaps regular meetings would be less adversarial if you said that you wanted certain information on a monthly basis so you could understand what was going on with the business and how it works, and without that, you wouldn't be in much position to help.  Being there to learn should be a lot less threatening than being there for oversight.

Or what if you just opened by saying, "There's just A LOT of stuff to have to worry about as a founder--and no one can reasonably expect you to see behind every corner.  While your business is different, I'd like to bring what I've seen other companies experience at different points into the conversation, so that we can get ahead of them or connect you to the people who have experienced these issues before."

That's a little useful than, "Show me your financials," regardless of what the docs said you have to do.  

Perhaps it might be worth asking a founder what they want the investor around for.  What do they see as the investor's job description?  It would be pretty hard not to establish trust if the investor just does what the founder laid out for them to do--as long as they're on the same page about what that should be.

"Why" helps build trust and it can go as deep as you want.  Why are you a VC?  Why do you bother being an active investor when you could just write the check and coast?  So much of the success of a founder relationship stems from the basics of personal connection, yet we spend a lot more time focused on the business than on the two or three people that are signing up to spend a fair amount of time together and share responsibilities to each other.

Perhaps the due diligence process needs a human update.