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

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.

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Transcript

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I'll share a key phrase that Charlie and I learned.

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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.

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"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.

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And this brings it back around to where we started.

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A strong rapport between that lead VC and the startup CEO is the single most important thing.

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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.

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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.

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What was the process like in negotiating with them?

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How did they change during the process?

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How did they change after the process?

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Did they follow through with the deal docs on everything that they promised in the term sheet?

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If not what changed?

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Back channeling is something that VCs do all the time, and so founders, you should be out there doing it too.

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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.

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This round and this situation was unusual in every way possible.

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What ended up happening as a result was that Charlie and I formed a deep level of trust and understanding.

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I could still negotiate as a fiduciary of my investors money.

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But as a partner with the CEO in this process, I could do it in a way where we could achieve mutually agreeable outcomes.

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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.

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And now Moxey's off to the races, and I think we're all going to be better for it.

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

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