March 20, 2024

204. Lessons Leading: The Business Agreement And Back To Relationships

204. Lessons Leading: The Business Agreement And Back To Relationships
Apple Podcasts podcast player icon Spotify podcast player icon RSS Feed podcast player icon Amazon Music podcast player icon Castbox podcast player icon Castro podcast player icon Deezer podcast player icon Goodpods podcast player icon iHeartRadio podcast player icon Overcast podcast player icon PocketCasts podcast player icon TuneIn podcast player icon
Season 4

Text your thoughts directly to Rich.

Coming back around to the first lesson, the relationship between the founder and lead VC is the most important part of the whole process.

About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast - get to know AVL Growth Partners at avlgrowth.com. (Sponsored)

About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.     

Transcript
WEBVTT

00:00:01.000 --> 00:00:04.030
I'll share a key phrase that Charlie and I learned.

00:00:04.690 --> 00:00:20.190
And that is saying,"That's the business agreement." I think this is lawyer speak for,"let it go, we've already agreed to it separately." When it comes down to these last minute exchanges, tensions will rise and everyone will lose the forest for the trees.

00:00:20.690 --> 00:00:30.687
"The business agreement" will let you plow through last minute roadblocks, but you can only do that when the lead VC and the CEO are deeply aligned.

00:00:31.687 --> 00:00:33.698
And this brings it back around to where we started.

00:00:34.237 --> 00:00:39.338
A strong rapport between that lead VC and the startup CEO is the single most important thing.

00:00:40.088 --> 00:00:51.551
When you have built that trust you can better direct the lawyers, cut out on costly, back and forth, and come out of the process with a relationship fortified by it, rather than fractured by it.

00:00:52.600 --> 00:00:59.231
For the founders out there, one of the best things that you can do is talk to other founders that have worked with this investor.

00:00:59.831 --> 00:01:02.081
What was the process like in negotiating with them?

00:01:02.320 --> 00:01:04.090
How did they change during the process?

00:01:04.150 --> 00:01:05.891
How did they change after the process?

00:01:06.221 --> 00:01:10.120
Did they follow through with the deal docs on everything that they promised in the term sheet?

00:01:10.540 --> 00:01:11.861
If not what changed?

00:01:12.861 --> 00:01:18.641
Back channeling is something that VCs do all the time, and so founders, you should be out there doing it too.

00:01:18.850 --> 00:01:25.840
You should be back-channeling on the venture funds that you're talking with in order to get feedback so that you know who you're dealing with.

00:01:26.850 --> 00:01:31.320
This round and this situation was unusual in every way possible.

00:01:31.820 --> 00:01:37.569
What ended up happening as a result was that Charlie and I formed a deep level of trust and understanding.

00:01:38.000 --> 00:01:41.819
I could still negotiate as a fiduciary of my investors money.

00:01:42.359 --> 00:01:48.486
But as a partner with the CEO in this process, I could do it in a way where we could achieve mutually agreeable outcomes.

00:01:49.536 --> 00:01:59.525
Having that strong relationship was able to pull us across the finish line, get the deal docs done and get this round finally done, closed and in the books.

00:02:00.135 --> 00:02:04.236
And now Moxey's off to the races, and I think we're all going to be better for it.