How Needy Are VCs?
Plenty of blogs have been written about how important investor updates are. The reasons why — and frequency with which — founders should send updates to their VCs and angel investors have been shared ad nauseam. Google “investor updates” and you’ll get pages and pages of results. Heck, I even wrote one once.
But how often to VCs really want to hear from founders? And how do they prefer to communicate with them?
In the old days, founder-investor communication mostly happened via email or phone. Today, there are phone calls and text messages, Slack channels and WhatsApp groups. There are asynchronous voice and video memos — even VR if you’re so inclined.
What do you mean MRR went down?
I asked 30 VCs about their preferred style of communication in order to get to the bottom of the question: how needy are VCs?
How Frequently Do VCs Schedule Calls?
To start off with, I asked our VCs to share their preferred frequency of scheduled calls with founders:
The majority of VCs I spoke with prefer either bi-weekly or monthly scheduled calls with their portfolio founders (40% of each). Two of the VCs preferred weekly calls, while 4 of them don’t have any regularly-scheduled calls (preferring to communicate entirely vs. ad hoc conversations instead).
A number of the investors noted that the frequency of scheduled calls depends on the relationship between the VC and the founder:
“The frequency of my communication with teams changes depending on the relationship, company stage, need for support (generally early-stage cos need more help), and whether there are major changes to discuss.”
- Dana Oshiro, Heavybit
Additionally, several pointed out that this frequency typically changes over time:
“It evolves over time. We like to zoom with founders 2x per monthly directly after an investment. Then scale back to 1x. Then quarterly. Then ad hoc.”
- Kirby Winfield, Ascend
Ad Hoc Communication
When it comes to ad hoc communication, almost all of the VCs were of the opinion that frequency is generally up to founders:
It's less about 'how regularly' and more about making sure they know what we can help with, trust us to be responsive and useful, and that we live up to their expectations.”
- Hunter Walk, Homebrew
Many also pointed out that the frequency of ad hoc communication naturally ebbs and flows as each startup progresses. For example, ad hoc communication is very frequent leading up to and during fundraising, but can be almost nonexistent at other times:
“We usually have…lots of ad hoc communications via text/WhatsApp/Telegram. In some cases, that can be multiple times a day (e.g. during a fundraise), sometimes our founders are just heads-down and there is not much to share (and an investor cannot really help).”
- Boris Wertz, Version One
Mostly, the VCs emphasized that their goal is to make it easy for founders to reach them when they need to:
“We set up a group chat on Signal with all of our founders the minutes they join the Race family. We want them to know we are here for them anytime he or she needs.”
- Edith Yeung, Race Capital
As for their preferred medium of communication, the answers were all over the place:
I guess no one likes phone calls anymore 🤷♂️
For founders, this variety can be challenging to manage (especially as your cap table grows). Which inevitably leads to the question of “your platform or mine?”.
As appealing as it might be to try to convince all of your investors to use your preferred medium, in my experience when working with someone who has a strong personal preference, you’re likely to get the most out of them by adapting to their preferred communication style instead of the other way around. For example, if you know that a particular VC lives on Slack, jumping on there when you need something from them is likely to get a faster response than if you contact them another way.
Of course, if an investor truly has no preference, then by all means go with whatever you prefer:
“Each founder chooses their own preferred methods — some are heavy texters/WhatsApp, others prefer emails or calls. Some want to bundle their most active investors into a single group, where others prefer startup:Homebrew specific chats. We're really open to anything they want.”
- Hunter Walk, Homebrew
What About In-Person?
It used to be that VCs strongly preferred to be physically close to the founders whose startups they invested in. I remember many conversations with investors back-in-the-day who justified their geographic investment preferences based on the importance of being able to meet in-person “if the founder needed it.” While that’s not nearly as common today, many investors still value the ability to communicate in-person with founders:
“In addition to monthly Zoom calls and email, slack, text/phone, I try to meet in-person with every founder at least once a quarter.”
- Prashant Matta, Panache Ventures
It’s About Balance
As particular as many investors are (shout out to the VC who prefers email over text because it’s “better for my OCD” 😉), at the end of the day the perspective shared by almost all of the VCs I spoke with is the desire to find balance:
“Overall, we want to find the right balance of being close enough to the founders/businesses so that we understand enough to be helpful while making sure they have the maximum time available to build the business.”
- Boris Wertz, Version One
At the end of the day, investors want to be as helpful as possible to their portfolio founders — they have significant financial incentive to do so — and communication is a key part of that. If investors aren’t up-to-speed with what’s going on in the business, there can be missed opportunities:
“It's the founders' time - they're not 'reporting' to us so much as we're using it to maintain a minimum viable context that allows us to be proactively useful to them vs just waiting for email investor updates.”
- Hunter Walk, Homebrew
(Thanks to all of the investors who responded to this one — and all the many ways they did so!)