The Co-Founder Courtship

Co-founding teams from Wistia, CodeSee, Pandium and Rubicon MD

Recently, I was listening to the Huberman Lab podcast where Dr. Huberman interviewed Dr. Buss, a founding member in the field of evolutionary psychology and Professor of Psychology at UT, Austin, whose research centers around How Humans Select & Keep Romantic Partners in Short & Long Term Relationships. In the podcast, Dr. Buss describes his research on how people select mates and the dynamics of courtship. While the podcast was focussed primarily on heterogeneous relationships, marriage and monogamy, I couldn’t help but think of the parallels with co-founder relationships. My brain is in the entrepreneurship space most of my waking hours, after all, and it made me think about how many entrepreneurs I know are looking for co-founders, yet many don’t appreciate that this is a similar courtship to mating and partnership. 

Many entrepreneurs believe they must have a co-founder and some are pressured by investors to have a particular type of co-founder. The conviction to have a co-founder is often based solely on complementary skills and experience vs. the softer, and often more important, relationship criteria. While there are some working papers out there, I have yet to see definitive research that proves whether one absolutely must have co-founders vs. going it alone as a solo founder. This is a highly subjective situation dependent on many factors; some of which I’ll discuss below. 

Do you need a co-founder?

I’ve worked both for and with hundreds of entrepreneurs in the last few decades and on the topic of co-founder relationships, my observation is that each situation is highly dependent on the chemistry, the experience each brings into the relationship, leadership styles and many other internal and external factors. While having co-founders can de-risk the business and/or complement skills, forcing these relationships can result in bad “marriages” that create more harm to a business than help. Certainly, when a great match happens it can be magic, but just like any marriage, one should not enter the relationship rashly.

When thinking about whether or not you need a co-founder, consider:

  • How could a co-founder balance your skills and experience? For example, if you are a technologist, but lack management or operating skills (marketing, sales, etc.), you may benefit from a more seasoned business leader as co-founder who’s seen the movie before. While many operating skills can be learned, early stage founders may underestimate how critical these skills are to have early on and rookie mistakes can set back (or kill) a business before it’s barely out of the gate. Read Khalid Halim’s thoughts on Hypergrowth and The Law Of Startup Physics for more on this point. Conversely, expertise and experience can be additive to the business without a co-founder title and compensation. Unless you are doing hard science that is your core business, building a business that is technology-forward or relies on tech to some degree is not nearly as hard as it once was. Having a strong first-hire who is technical can suffice; the same holds for someone with strong sales, marketing or other operational skills.
  • Is domain expertise critical for your venture? Unless you are already the expert in the particular field your venture intends to address, you may need a co-founder with domain specific expertise. Having domain expertise will not only inform the product strategy, but will also help the venture gain credibility in the market and potentially open doors on the sales side. Investors may expect or even require there be a domain expert on the co-founding team, but similar to the point above, you may also be well served with a first hire or even an advisor who could serve you in this way vs. a co-founder.
  • Most importantly, ask yourself whether you value partnership, shared risk and collaboration with others. It can be great to have someone to brainstorm with, share the workload and to commiserate with during your journey, but having co-founders – like a committed personal partnership – is also a big test of your ability to be vulnerable, handle conflict and willingness to compromise. There will be many times your co-founding team will disagree on things – from product and hiring decisions to operating procedures and a fundraising strategy – and how you process these decisions together is fundamental to a healthy co-founding relationship. Self awareness, a willingness to lean into conflict and ability to thrive in ambiguous situations will be critical in a co-founding relationship. If you question whether you are up for sharing these experiences with one or more co-founders, you may need to do some introspective work before taking on a co-founder or, perhaps, go it alone.

Anyone thinking about having a co-founder must go beyond the skills and experience aspects and consider the fact that they are entering into a deep, personal relationship. Whether it’s because you couldn’t find “the one” and time is of the essence or because you are self aware enough to know you are better off going it alone, taking the solo route is perfectly doable by rounding out your team with necessary skills and expertise. You might also consider a second in command (COO, CTO, etc.) who plays a key role in the business without the official co-founder title and compensation. These individuals can still receive founding team worthy equity grants and, in earlier stage businesses could be anointed as “co-founder” down the road if the relationship blossoms over time.

The Co-Founder Courtship

If you’ve decided that you really want and/or need a co-founder, you’ve basically decided to seek a mate for a long term partnership. Just like a personal relationship may result in children, big financial decisions (like buying a house), running a household, etc., a co-founding relationship will force you to commit to how you will nurture employees, manage finances and run your business. There are big decisions to make – “how will we educate our kids?” is similar to “what kind of company culture will we have?”. There are philosophies on which to reach alignment – “where will we raise our family?” is similar to “will we have a home office or remote-friendly work environment?”. You can’t have a few coffee meetings with a prospective co-founder to discover how you will answer these deeper questions. It’s a courtship and despite the urgency you may have to get going with the venture so you can raise money, hire people, etc., I can’t emphasize enough how important it is to nurture these prospective relationships.

Herewith a few suggestions on how to court your co-founder(s):

  • Conduct a listening tour by meeting other startup co-founders. Talk with them about their own courtship process. Ask if there were questions they wish they had asked and hurdles they had to overcome early in their relationship. Even the greatest co-founding teams have war stories to tell about stressful situations in their relationships and what they learned from these experiences.
  • Using insights from the listening tour, along with your personal preferences, write a co-founder job description (JD) and include experience, skills and your ideal, softer, characteristics for this person. If you already have someone in mind, try to stay objective and not write this JD to ensure they can fill the role (confirmation bias). Use this as your guide as you meet prospective co-founders and adjust as you go. It’s very likely that the more prospects you meet, the more tweaks you’ll make to that JD and finding “the one”.
    • NOTE: If more than two of you are thinking about becoming co-founders, do the JD method as a “diverge-converge” exercise. Discuss potential roles each may fill and have each of you, independently (diverge) write the optimal co-founder JDs for each role. Once each has taken a stab at this exercise on their own, share these JDs with each other (converge) and discuss where you were all coming from for each role. Not only will this better define each role, but it will allow you and your prospective co-founders to expose perceptions and expectations of each other and how the leadership of the business will play out.
  • Experienced hiring managers know that it is rare they’ll hire the first candidate they interview for a newly created role because they may not be clear on the right fit for the role until they’ve met a few types of candidates. The same holds for co-founders. You may have to test a few potential co-founder candidates before inking a co-founder agreement. Try to meet at least a half-dozen people who may solve for the gaps you are hoping to fill (expertise, experience, chemistry, etc.). Yes, this may mean you are “dating more than one person at a time”, but you’ll be far more clear about fit through this series of conversations.
    • NOTE: Finding a half-dozen candidates may not be easy. Tap into your network, ask prospective investors, former professors, etc. and tell them what you’re looking for. Share the JD. Attend conferences, talks etc. and be clear you are in the market for a co-founder. YC also released a co-founder matching tool that may be helpful.
  • Test the relationship beyond coffee chats and dinners. As noted in the Huberman podcast noted above, relationships are truly tested when the parties engage in experiences that allow them to see more dimensions of their personalities. For example, go on a road trip or partake in an activity that neither of you have done before. See how each of you make decisions together like where to eat lunch or which trail to hike. Even a game of mini golf at a course neither of you have visited or playing a video game together can test how you collaborate and/or handle competition. You might also consider working on a start-up related project together to see how that feels, such as co-creating a pitch deck or conducting customer interviews together.
    • NOTE: If you are considering a first time co-founding relationship with someone you’ve worked with at a company in the past, this does not give you a “pass” to skip this part of the process. Co-founding a business with a former coworker is like going from dating to living together. You are sharing responsibilities you likely did not have when you were colleagues at a business where someone else was accountable for the overall successes and failures and, likely, making more strategic decisions than you were privy to.
  • Have vulnerable conversations. One of the most popular sessions in my course at HBS is the discussion around one’s relationship with money. Most adults have very different perspectives on money and typically this is rooted in deep family or personal experiences, sometimes starting in early childhood. A parent losing a job, having to work at a young age to support family, credit card debt, anxiety about school loans, etc. Understanding how you and your co-founder think about money will give you a lot of perspective when it comes time to raise capital, price your product, pay employees, etc. Similarly, it’s important to talk about any peak moments in past jobs, school, etc. that inform your attitudes about leadership, culture and how products are designed/built, etc. While these conversations may feel very uncomfortable, it’s a step towards a solid working foundation in what will almost surely be a roller coaster of a journey together. Being able to have these conversations also tests how you’ll handle and support each other during conflict and stressful moments. You will have context and better understand where you are each coming from. Most importantly, these types of conversations don’t stop once you agree to be co-founders; they should be ongoing throughout the life of your venture as each co-founder and the relationship matures.
  • Finally, I recommend that prospective co-founders meet each others’ partners/families/BFFs. Not only does this further uncover the broader context of who these individuals are, but it also helps these important people in your lives understand this new relationship you may be entering. So, when you are up until 2am slacking with your co-founder about the upcoming pitch or how to deal with a customer issue, they know who that person is and how they are partnered with you. 
    • NOTE: For those considering co-founders who ARE your partner/family member/BFF, I encourage you to enter with a mindset around taking a personal partnership from no kids to four kids. It brings the relationship to a whole new level. This can be an incredibly rewarding experience for you, but it can also test the relationship to the max. While this person/people know and probably trust each other better than strangers co-founding a business together, it also means there is likely baggage that can create more emotion and triggers around certain issues than the average partnership. I have worked with incredibly endearing and high performing co-founding teams made up of siblings, married couples and BFFs, but I have also seen these types of co-founding teams erode due to irreparable events rooted in their personal history. Do not take this choice lightly. Consider getting a coach early on who specializes in working with co-founders who also have personal history together. I guarantee you will not be able to put your personal stuff in a box outside your business. Personal tensions will come up – either overtly or subtly – and having the support to work through it will be crucial to your long term success.

One cannot rush the co-founder courtship process. The most successful co-founding relationships I’ve seen inevitably end up being far more than co-workers. They are practically family and while that means potentially more emotions are at stake, it’s their mutual understanding and deep respect for each other that allows them to traverse this often treacherous journey. They have mutual trust and are committed to ensuring the success of their business, together.

There are many other articles and videos published on this topic, but a few I like are here and here.

Do you have lessons learned from your co-founder courting and/or working relationships? Please share in the comments!

Good For Her Announces Cohort Four!

It is a great joy to announce that the fourth Good For Her (GFH) cohort has launched! With over forty applications this year, it was incredibly hard to select our next group of extraordinary women. Each cohort consists of only 8–10 members to foster the intimacy that we’ve learned creates a strong support network. This new cohort has ten members, including an Aspiring Entrepreneur which is a role designed to connect underrepresented women early in their entrepreneurial journeys with women further along who can serve as role models and mentors.

I created GFH as a pay-it-forward model for women founders who are often operating solo and/or with limited connections to peer founders. You can read more about my founding story of GFH here. While fundraising is not the only metric of success — it is a mortgage, after all — our current cohort members have raised over $70M in capital in the past year; with several closing $12M+ A-rounds (e.g., HumanFirst and Wagmo) and and one recently closing a $20M round. Beyond funds raised, these businesses are focused on being great employers with high retention rates, growing revenue exponentially, and building industry leading brands.

Our newest cohort members are centered in NYC, however with our renewed ability to travel and many opportunities to connect virtually, we have expanded our reach as far as the UK and LA. Our member companies represent a diverse range of industries — from fintech and martech to consumer products and services, biotech, social-environmental impact solutions and everything in between. These are not “cute lady companies”. They are serious businesses making an impact on the world. The combined GFH community identifies as 52% BIPOC and member ages range from early 20s to mid-fifties.

When a new cohort starts, I am very engaged in pulling the group together and fostering connections. Over time, each cohort becomes its own “thing” without my routine facilitation. While each cohort has a special bond, the GFH community supports all members with our “give as much as you get” philosophy. From quick responses on Slack to jumping on calls in the moment when urgent advice is needed, these women strive to support each other 24×7. Now, with three cohorts well on their way, it’s time to welcome cohort four! Herewith, our newest members:

Clockwise from top left:

Mae Abdelrahman — Aspiring Entrepreneur
Yuliya Bel — Notus
Allie Eagan — Veracity
Gina Levy — Kindra Connect
Julia Fan Li — Micrographia Bio
Shelly Xu — Shelly Xu Design
Amy Tang — Folio
Rachel Soper Sanders — Rootine
Tiffany Ricks — HacWare
Helen Lin — Discern.io

I am sooooo excited about partnering with this group! The buzz has already started on Slack and they are receiving the much needed support they crave. Welcome cohort four!!

Check out our website for more information about GFH and pay attention to all of our members — they are doing amazing things!

Balancing The Many Hats Of A Startup CEO

Illustration by Amelia Austin (c)

Startup founders wear many hats that they take on and off as company priorities ebb and flow; especially, but not exclusively, CEOs. One moment they are the CFO and raising capital and the next they are the Head of Product and making critical roadmap decisions. As a quarter-end nears, they become heads of Sales and as the company expands (or contracts) they’re running HR. There can be tremendous stress when a founder tries to wear too many hats at once or struggles to decide which to wear, which to remove, and which to hand off to someone on their team – if such a team exists! The entrepreneurs I coach have used following framework I’ve created to help them determine which hats to where when. While this article is largely focused on startup CEOs, the framework can also be an effective tool for other organizational leaders.

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The Hats

The most common array of hats that a CEO may wear at any given time fall into the categories below, but no CEO – early stage or not – can split their time and attention so perfectly as the chart denotes.

Before deciding which hats to wear and when, a startup CEO should first identify with what their hats (categories) are in their current role. Using the visual above, here’s how I define these very common categories:

Product (What & When): This is what the company produces. It includes customer discovery, design, building, shipping and support. It also includes prioritization and tradeoff decision making for features, new products and services. Many startup CEOs are product people and this can often be one of the hardest hats to take off completely – if ever. Note that being a product visionary and/or a great coder or designer does not necessarily mean one is a great Product Manager – knowing how to make tradeoffs, analyze customer requirements or develop a product roadmap. Be sure to fully explore this “hat” before deciding it’s one to wear or take off.

Culture & Process (How): I was inspired recently by a coaching client of mine who combined these two into one category. If the culture doesn’t work, then the processes won’t work either. Creating high performing teams goes well beyond what workflows, policies and procedures are in place. It is how the team communicates, operates and evolves as a living organism. Never underestimate the value of focusing on culture with process starting from day one! Some CEOs are natural culture builders and system thinkers, but if this is not a strong suit, it’s definitely a hat that should be worn by an in-house culture expert or by someone with natural team-building/program management skills.

Strategy (Where, Why & When): Determining the company’s True North, setting direction for at least the next 12-18 months and making critical decisions about the company’s mission for things like fundraising, revenue growth and human capital. This is also about defining and communicating why the company is doing what it does which is as important as where it is going. Employees and investors/board members all perform better when there is clarity on why the company is moving in a particular direction. This hat is quite commonly on the CEO’s head forever.

Talent & Development (Who & How): A company will not succeed or grow without hyper focus on the growth of their employees. It is vital to the success and stability of an organization to establish best in class hiring practices and programs as well as to develop each person’s skills as individuals and leaders. As companies grow, CEOs must be thoughtful about where to focus hiring efforts, how to provide incentives to retain top performers and how to grow those with high potential. In addition, as companies grow, there will always be tradeoffs on when to promote from within, when to hire more experienced talent and when it’s time for some team members to move on. CEOs often wear this hat more often than others, but many have COOs or strong HR leaders on their teams who wear this hat permanently.

Back Office (How): A company can have the best product and team in the world and mess things up royally because the back office hat was on the wrong individual’s head. This is mostly finance (accounting, receivables, payroll, etc.) and legal (employee contracts, partnerships, etc.). I’m amazed at how many CEOs wear this hat for too long. It’s ok early stage, but let the professionals do this work once the company hits product market fit and is beginning to operate at scale. Some CEOs are former CFOs who are perfectly capable of leading back office teams, but data shows that CFOs often lack “Outside-in” thinking (a strong mega-trend and customer focus)” and lack the creative and inspirational leadership qualities of a great CEO.

Marketing, Sales & Business Development (What, Why & When): Brand identity, target audiences, community development, filling the pipeline, closing deals and creating strategic partnerships. These tasks often require CEO leadership – especially early stage. Some CEOs are very marketing/sales oriented which can derive huge benefits for the business as long as there are capable leaders on the team wearing other hats. However, many CEOs are not marketers and, like the Back Office hat, should leave that work to the experts.

The Have-to-dos, Want-to-dos & Good-ats

Rather than being stressed out trying to balance all hats at once, it is best to focus on wearing 1-2 hats at a time. These 1-2 hats are those that HAVE to be done. It’s great when these prioritized hats also happen to be hats a leader wants to wear and require skills that they believe they are good at, but that is not always the case – especially for early stage CEOs who often need to do a lot of things that they may be good at, but don’t necessarily want to do. Similarly, there can be things a CEO is good at and wants to do, but the business doesn’t require them to do it. Finally, there are times when something has to be done, the CEO wants to do it, but they lack the skill to do it well (self-professed or not!). Here are a few examples:

  • Finances – CEOs may be good at doing the accounting for the business and it has to be done, but often very willing to give that up as soon as they can hire a head of finance. They don’t want to do it!
  • Product/Technology – No matter how much a founder/CEO wants to design or code – and they may be good at it – there is a point as a company scales when CEOs have to take off this hat. They are no longer “have to-dos” at their level. Note, I have seen a number of CEO-Founders take their CEO hats off to dive back into the product!
  • Hiring – Inexperienced CEOs may be managing people and leading teams for the first time. They have to hire and want to hire, but are often unskilled when it comes to sourcing, interviewing and managing the onboarding experience. This is a skill they are not good at. However, this may be a skill they have to develop vs. hand off to someone to do for them.

If a company has the runway, the CEO can usually move swiftly to swap or delegate hats with the support of their co-founders and leadership team. They may hire more seasoned leaders or team members and/or offer training for those who need to develop their skills. However, for the fledgling teams who can’t fund these improvements, it is even more important to make hard choices about which hats to wear…even if that means letting some things slide or not executing perfectly. The tradeoffs can be hard and it is extremely common for CEOs to become so paralyzed about which hats to wear that the performance of the company is suffering more than if they had just picked 1-2 hats to focus on and move forward. The focus of this exercise can allow a leader to move quickly from one to the next so things don’t slide for too long.

To get started on assessing “have to-dos (HTDs), want to-dos (WTDs) and good-ats (GAs)”, I recommend a two-pronged approach:

  1. Using the categories or hats identified, rate the HTDs, WTDs and GAs today and what the HTDs should be in the future. This exercise requires self reflection and a large dose of humility.
  2. Define what measurable goals must be achieved to remove a particular hat OR issues that need to be resolved to put on a particular hat. Include an action plan (with timeline) that ensures goals can be met. 

Using a framework like the chart below, begin to outline and rate the categories, 1-5. 1=low (this is a hat not being worn, not wanting to do, or something one is not good at ) and 5=high (absolutely something that has to be done, there’s strong passion to do it, self-assesses* that it is a strong skill).

*Self assessed skills are different than how others perceive one’s abilities. If unsure, do a 360-feedback survey with your team or seek outside help!

An optional third step is to color code each row to visually identify hats that are critical to wear (red), not urgent but important (yellow) and the hats that are satisfactory at this time (green).

I’ve created two charts below – before and after – as examples of how a CEO of a post series A startup with modest revenue might perform this exercise:

BEFORE

In the above example, the rows in green show where the CEO is satisfied with their current involvement (“hat wearing”). The rows in yellow are places where they need to adjust their involvement, but not urgent. The two red rows are urgent and where the CEO wants to put their focus. 

  • In the case of Culture & Process, the CEO only rates their hat wearing as a “2” and there are serious issues in the organization to address. The CEO has identified what is going on in the “HTD Achieved/Needed When…” column which requires them to put on the hat and what actions they will take to ensure they are wearing that hat at least at a “4” (HTD Future). 
  • In the second case, the CEO knows the Back Office work is important, but does not want to do back office work, nor do they feel they are good at it. Thus, they are working to remove the Back Office hat and reducing their involvement from a 4 to a 1. In this case, the bullets in the “HTD Achieved/Needed When…” column clarify what will be happening when the CEO has officially taken off that hat, moving it to a “1” (HTD Future).

Identifying what hats need wearing – and how firmly to wear/remove said hats – is step one. Taking actions to add or remove the hat(s) is step two. In the case of ramping up on Culture & Process noted above, the CEO would kick off the action items and set a timeframe of when they would be able to remove that hat. They would then update the chart to be clear what will need to be in place for them to remove/loosen that hat. Similar with Back Office work, once the key actions are achieved, the chart is updated to reflect that the Back Office hat no longer needs wearing. The updated chart may look like this:

AFTER

With the updates above, the CEO has removed their Back Office hat and is firmly wearing the Culture & Process hat. They can now continue to focus on the Culture & Process hat until it can be taken off (“1”). They can also decide which of the two yellow rows – Product and Talent & Development – they want to focus on next while the other areas of the business require less of their attention. 

Most CEOs who follow this process use months or quarters to time-box focused efforts and update the charts, but it all depends on how one works and how fast change is happening inside the organization. Choose what works best for you!

No Recipe Is Perfect

The exercise above is one way of thinking about how to balance many hats a CEO – or any leader of a large team – might wear. There’s no perfect algorithm and while one might aim to only wear a maximum of two hats at a time, there will be times when more hats will have to be worn. I’ve also seen CEOs who find that once they’ve mastered a new skill, the hat they didn’t want to wear is actually one that they enjoyed wearing more than they expected.

There are of course sometimes when CEOs realize that no matter how much training, coaching or mentoring they get, they are not able to wear any of the hats well or they just don’t enjoy wearing them. This is often when the company is achieving a level of scale that requires more experience than the CEO’s own professional experience. Some CEOs recognize this and work with their boards to find a successor, but sometimes this can be a decision taken out of a CEO’s hands when their board/investors decide the business can’t wait for the CEO to grow into the role. I’ve also seen many CEOs who find a great partner (President or COO) to run the business with them and augment some of the skills they have yet to or want to master. This not only keeps the company on the rails, but gives the CEO a role model to learn from along the way.

Conclusion

CEOs should be performing a regular assessment of where their time is focused, identify measurable results when changes are made and what actions to take to get there. Even a simple visual like the Before and After on the balance wheels below can kick start the process. Identifying what the current focus areas are (before) and where should they be (after).

No matter how a leader decides to assess and prioritize their hats, leaning into the balancing process will likely mitigate stress and potential burnout. What processes have you seen that are effective towards balancing hat wearing? Please share in the comments! Meanwhile, if you are thinking about trying this exercise, I have created a google sheet template for anyone to use to start this process. Feel free to save a copy of the template for yourself and dig in!

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NOTE: The balancing hat illustration at the top of this article was created by my daughter, Amelia Austin and is copy-written.

Virtual Fundraising

A number of the entrepreneurs I work with are in the middle of fundraising during this crazy pandemic. It’s unclear when we’ll ever be able to meet in person again, let alone travel to venture fund offices for live pitches. Therefore, most are pitching virtually via Zoom or other mediums. A common theme throughout their process has been the lack of face time with potential investors. Investors are expressing it’s hard to write a term sheet or know what it’s like to work with someone they’ve never met in person. It’s reasonable to think that an entrepreneur can accept that they’ll have to wait to meet the investor in person once it’s safe to move about the country again; they need liquidity and are quite used to making sacrifices to forge ahead. However, investors are less desperate and it increasingly unclear if the “I can’t write you a term sheet if I never met you in person” is valid or just another excuse to bow out of a deal.

This got me to thinking about the perspective of each in these times:

The In-Person Pitch

Consider what an entrepreneur worries about when fundraising in person:

  • Travel logistics: In addition to the cost of a flight and hotel expenses, if I can’t crash on a friend’s couch, I’ll be in SF for 48 hours and have to lock in meetings along Sandhill Road, ideally, back to back and with enough gaps to get from one to the next. OR…. Should I take the subway and risk ruining my professional look if there’s no AC or rack up ride-share fees that my startup just can’t afford right now?
  • I’m on their turf: Not knowing what to expect in the conference room, AV, who’ll be there and how they’ll perceive me as I am escorted through the office. Who’s watching, what physical attributes are they looking for, etc.
  • Who attends: We can’t swing all co-founders on the road financially or being out of the office for full days to pitch or for diligence. We have to keep the business moving!

There is certainly upside for entrepreneurs to get in-person face time with their future investors, but there’s not much downside for the investor to do in-person meetings.

Virtual Pitches

Alternatively, the opportunities virtual pitches present to entrepreneurs include:

  • Schedule flexibility — Let me know what works for you! No travel necessary.
  • Cost savings — No flights, hotels or ride-share fees. No hit to the bottom line!
  • My turf — I’m in my personal space, representing who I am and feeling comfortable in my own chair. No one is scanning how I walk or what I’m wearing. I am authentically me!
  • My team — Need to chat with my CTO? She can jump on a video call whenever you’re free. Want to walk through our financials? My finance leader is happy to screen share our pro-forma to review with you.

From an investor perspective, one could imagine that the schedule logistics are the biggest plus for virtual pitches. But there are also some clear potential downsides of virtual pitches for both parties — many related to basic remote work challenges highlighted here, but I’ll call out a few:

  • Attention span — will both parties be fully engaged or distracted by other screen activity? (although I have seen many VCs looking a their laptops/cell phones more than engaging with entrepreneurs in a boardroom pitching right in front of them)
  • Eye contact — it’s hard enough to make eye contact in person let alone tracking gaze awareness and looking for social cues. There is no opportunity to catch a side glance or reaction from one party to the other. The post-meeting debrief won’t include observations like “did you notice when we shared our financial projections that they all looked at each other like ‘WOW’?” or when two partners notice body language between co-founders that suggest they may not be aligned on the company’s go-to-market strategy.
  • Cognitive load — not only does constantly looking at yourself while you are presenting create a lot of emotional pressure, but trying hard to track all of the social cues in 2D can be exhausting for all parties and could cloud the focus of the discussion.
  • Informal connections — the post-meeting socializing one often experiences is completely lost. The casual walk out of the conference room, chat at the coffee area or even the bio break that may lead an entrepreneur and investor to be washing their hands at the same time. Each of those situations are opportunities to form informal connections that don’t happen in the boardroom. You find out you have kids the same age or that you both like the same brand of lipstick. Your college roommate is in their soccer league or you both prefer oat milk over soy milk. While these are minor details, they make these connections more personal and build trust in what may become an important working relationship.

Optimizing For Our Current Normal

We won’t likely be going back into boardrooms for pitches any time soon, so herewith some suggestions to ensure the virtual-only rounds have a better chance of success:

  • Turn off your self-view and expand your screen to just video so you are fully engaged. Put aside your phone and resist texting with your co-founder/partners during the call. You wouldn’t do that in the boardroom (would you?!), so don’t do it on video.
  • For both sides, focus on facial reactions and body language (like leaning back or arm folding). Pause when you think “I really want to text my colleague to get their reaction to what’s going on right now” and consider how to incorporate that into the conversation. For entrepreneurs, this may be saying “Pat, I noticed you looked surprised when I mentioned we have large traction with such a unique audience. Would you like me to explain that further?” Or, “Sam, you seemed taken aback when we shared our unit economics. I have a backup slide with more detail if you’d like to dig into it.”. For Investors, it could be “Tyler, I noticed a long pause when I asked you about your engineering team. I am happy to discuss that further after this call if it’s a longer conversation or you’d like your CTO to be part of the discussion.” [Note: All of these examples could happen in person too, but may be done with more intention when on a video call.]
  • If the pitch is an hour or less, consider tacking on 10–15 minutes post-meeting to allow for more informal conversations. If it’s a longer, diligence or full partner meeting, consider scheduling a mid-point break for the entrepreneur to do a breakout with partners/team members they haven’t met yet. Or schedule these less formal chats as short meetings that follow the main event. Be explicit that these are more personal connections (“tell me more about YOU”) and not for deeper business dives. Yes, it’s more time on the calendar, but that’s the time the entrepreneur may have used to travel to your office or that you used to drive to the office or walk from your office to the board room.
  • Create opportunities for reference checking — Investors, make intros to other entrepreneurs in your portfolio who can share what it’s been like to work with your team after the money was wired. Entrepreneurs, make intros to customers, angel investors, mentors or others who can speak to who you are beyond your business. [NOTE: It’s no secret that backchannel references will happen on both sides, regardless, but being proactive about this is always a good thing!]
  • For entrepreneurs with physical products vs. software that’s easy to demo online, send prototypes or latest products in-market to investors in advance. Allow them to see and feel your product! You’d likely have brought it with you if you were in person, so why not send in advance? If you have limited supplies, ask the investor to send it back post-pitch. Any decent investor should be trustworthy enough to do that…on their dime…even if no term sheet comes of it.

Finally, investors, stop using lack of face time as a reason not to invest. Your investment theses are still valid whether you meet a founder in person or not and pattern matching can still happen on video. Trust your instincts and consider how incredible these humans are to be able to run and scale their businesses even during a pandemic with most if not all virtual teams. They are resilient and determined not to be thwarted by fully remote work environments. The strong survive and prosper, and so will you!

Do you have other tips to enhance the virtual pitch process for entrepreneurs and/or investors? Please add in the comments!