Read on Twitter
1. Someone asked me about what can be done when people young in their investment career get slammed on rating sites. I think there are a few problems in the industry that lead to these unfortunate outcomes.
2. First, it seems that people are encouraged to put their title as “VC/Investor @ Firm” when I don’t think it’s appropriate. If you’re not a GP, use your specific title. This helps spell out what you can and cannot be called upon to do and where responsibilities land.
3. That said, firms need to be MUCH clearer with people who are not GPs what protocol is when interfacing with founders (how to outline to founders what is a formal pitch meeting vs just an intro call for example) and how that firm delivers a no.
4. One type of no is something that the analyst or associate can deliver with confidence as there are more clear cases. “This is outside the scope of our work because (economics of deal, focus of work, etc).”
5. Let& #39;s say it& #39;s a no after diligence. Articulate why it& #39;s a no while throwing the GPs under the bus (after all it& #39;s their decision). “After sharing with the team, we decided that we can’t move forward because of X. Would love for you to come back when Y milestone is reached.”
6. The investor industry has a terrible bad habit and history of not showcasing who has decision authority, transparency into how diligence processes work, if they are deploying capital, if they are wasting a company& #39;s time by information gathering, and not giving a timely no.
7. All of these things lend itself to junior members of the team taking on criticism and hate that is not necessarily due to that person being unsavory to work with but because the system that they are in is broken and modeling great investor relations is few and far between.
8. It’s also easier to hate on the newer analyst than the GP because there is less potential retribution, back channeling, and also potentially less face time with the GP.
9. To those who want to rate “investors” — I’m all for rating overall firms and GPs. I think anyone you have an issue with outside of that can be better handled by attempting to contact someone else at the firm with your concerns or rating the firm entirely.
10. Ruining a junior person’s career when they aren’t getting halfway decent training is like being angry at an employee for being incompetent when leadership isn’t doing their job to bring that employee up to speed or give them professional development. Systems matter.
11. If you do get personally slammed online there are a few things I might suggest that may or may not be good ideas. YMMV.
12. Let it pass. Most of these rating sites are a flash in the pan. I’ve seen handfuls of them come and go very very quickly. And remember bad news seems to spread more than good which means that these sites have a marketing incentive for slams.
13. Write up your own statement if you believe the review is in bad faith. I’d really only recommend this if it catches major heat. Otherwise you might be blowing up a small issue far bigger than it would have originally traveled on its own.
14. Have the firm write a statement either taking responsibility for a habit they need to change in their firm (and therefore also enhance in professional development) or backing you up. Again would really only recommend if something picks up.
15/end. Cut them off at the pass. Have a sense on if you& #39;re being a positive influence. Make intros, give specific feedback, communicate timely, etc. You want founders to leave meetings maybe not happy about the outcome itself but happier and better for having met you.
And thank you to those who brought this issue to my attention and helped me to flesh out these thoughts over the last couple of days! You know who you are -- happy to say publicly but I know this is a sensitive topic so hit me up if you want a mention!
