Today I got an email from a board member who is amazingly quick when replying to board decisions and action items. He is Dick Kramich, the dean of New Enterprise Associates NEA.
I've had the privilege of knowing Dick from the early days in Silicon Valley. He is an icon of VCs and of the rare few who take time to encourage entrepreneurs and the global venture community. As a result, NEA has attract outstanding individuals who have become world-class partners and helped build some of the greatest new enterprises (gorillas)of our time.
I thought you would benefit by thinking about the distinguishing characteristics of a great venture capitalist and board member. It will help you as you screen the VCs you consider as you seek investors for your startup. Here are some of the things I see in Dick:
- Humility with confidence. Dick is positive without being arrogant. He is confident yet open to ideas of others. Meetings are discussions, not dictated one-way sessions.
- Suggestive and positive, not critical and negative. As issues and problems are discussed, Dick has a special way of suggesting a positive solution. He does not spend a lot of time chastising management for getting into a mess. His suggestions are immediate and practical.
- Swift responses. As fast as the decision approval is needed, I find emails from Dick among the first to arrive. VCs are terribly busy and travel a great portion of their time. Dick responds swiftly in spite of the intense demands on his time. He usually bets me to the keyboard or Blackberry. The startups gain competitive momentum because of swift decision making.
- All yours. When you are in meetings with Dick, you feel as if you and your company are the most important to him. You get undivided attention. Full time. The quality of time spent thus becomes very high and so do the quality of decisions.
- Best of the best. When you need access to business people, investors, partners and so on, Dick does not hesitate to not only suggest, but arrange for the contact to be quickly made. I've been on the way to the parking lot and found him already having make the email or phone call.
- Creative with boldness. Dick knows world-class startups are built with creative ideas from people with courage. His natural level of thinking lifts the rest of us up to his level and we get stimulated to be extra-creative and innovative.
- Intuitive wisdom. As I think about the competitive maneuvers of startups I've seen him invest in, I recall how he gave his opinion about what to do after the analysis was completed. It is there that he seems to know the best move among the many, with uncanny intuition. Years of learning, from mistakes as well as winners, has given him much wisdom and perspective. That is priceless to a startup CEO.
- Constructive toughness. Dick knows when the hard decisions must be made. It may be management stepping aside, a re-financing in times of trouble, and so on. He faces reality with clarity and has the will to make the best of difficult situations.
- Generous. Dick invites young people to join gatherings, events, and meetings so they can learn. He spends his precious time (and money) on things that uplift others in the venture community. At the moment, he is living in Shanghai to be closer and more able to add value to the youthful venture community there.
- People are number one. Dick looks for outstanding people, constantly. He has stunning talent working with him at NEA, they form a global brain trust. I find he is uncanny at seeing the skill sets in entrepreneurs. His ability to detect the best (and the not best) adds special value to his support of first-time startup CEOs and their core teams, especially as they go through the hiring process.
All VCs have money, networks of contacts, ethics and ideas about how to make your startup successful. What stands out are the few who have some of what I have noted above. Yes, I know a couple of others. But because the emails today triggered my thinking about Dick, I have shared my observations with you by using him as my example.
BOTTOM LINE: Pick your board members carefully. You get more than money with a venture capitalist. And you have to live with that person for half a decade or more. Some of the best are represented by the Dick Kramlich's of the world. They are few and far between. But look for their characteristics in the VCs and angels you are planning on using. When you find the right ones, they'll help you build power into your unfair advantage.