Does VCs really add value? This is a study about the venture capitalist’s value-add. By Carl Fritjofsson (Creandum) and Henri Deshays (NewFund) in collaboration with Kauffman Fellows.

1. 1
THE VC / FOUNDER
SPLIT

2. 2
Survey format, participants, and main findings
Methodology and Big Picture Results

3. 3
Survey format: questionnaire to Founders and VCs
10Questions,incl.
Most & Least important factors to decide wheth
to partner with a VC or founder
Perceived frequency of contact
Operational support functions offered from VC
ENTREPRENEURS VCs
Mirroredquestions
Independentanswers
Questionnaire
with questions in
different formats
Ratings 1-10, factor ranking,
etc.
Adapted to the
respective
participant
Same question type, but
adapted to entrepreneur / VC
category

4. Diverse survey participants across VCs and Founders
4
GEOGRAPHIES
Voluntary, unpaid
survey
Disseminated by social media
and direct contact throughout
H&C network, February and
March 2018
FOUNDERS
121
VCs
98
AUM
<30m$
to 2bn$+
Pre-seed to
Series D
Investment stages

5. 5
VCs overestimate the value of their contribution
Founder
5.3
VC
7.0
VCs score their level of
“impact and helpfulness” 32%
higher than entrepreneurs
score their own VCs
On a scale of 1 to 10, VCs average self-score
compared to Founders’ scoring their VCs
20.7% 13.4%
60.3%
27.8%
19.0%
58.8%
Founders VCs
Once a quarter Once a month
Once a week or more
VCs report weekly
communication 3x more often
than Founders
How often do you speak with one of
your VCs or one of your portfolio
companies?

6. 6
Based on rankings by percentage of Founders and VCs rating characteristics as top-three most important criteria for
choosing a VC or investing in a startup
Least important factors for partnerships mirrored the findings for most important
Most Important Factors for Partnerships

7. 7
Founders rank deal terms and speed more highly
Personalrelationship
&chemistry
DealTerms
Speed
Referencesfrom
otherfounders
Network/rolodex
intheindustry
#1 Personalrelationship
&chemistry
DealTerms
Brandofpartner
Generalexperience
ofpartner
Network/rolodex
intheindustry
Founders VCs

8. Personal relationship & chemistry
Deal Terms
Speed
References from other founders
Network / rolodex in the industry
Personal relationship & chemistry
Deal Terms
Brand of partner
General experience of partner
Network / rolodex in the industry
Most important factors for partnering or making investments
Speed
General experience of VC
Track record
Brand of VC
Operational support
Investment sector focus
References from other founders
Track record
Operational support
Investment sector focus
ImportanttoFounders ImportanttoVCs

9. 11
-30% -20% -10% 0% 10% 20% 30% 40%
Personal relationship / chemistry
Deal terms
Speed
Network / rolodex within industry
References from other founders
Brand of VC / Partner
General experience of VC / Partner
Track Record
Operational Support
Investment sector focus
ImportanttoFounders ImportanttoVCs
Large differences for factors like deal terms, speed, and brand of partner
VCs and Founders value
different factors
Differences are ranked by % of respondents that
reported this as the top-3 most important
characteristic

10. 12
Founders and VCs checked off which operational support functions they either received or offered
Perspectives: Operational Support Functions Received
vs. Offered by VCs

11. 13
Hire-Out vs. Hire-In & Biz Dev Functions
0%
20%
40%
60%
80%
Finance, legal, admin. Marketing / Growth Talent / Recruiting Sales / Biz Dev
Founders VCs
Hire-Out Functions
are similar
Founders report receiving slightly
fewer services than VCs offer, but
they are relatively similar
Hire-In Functions
diverge
Founders report receiving less than
half of these services VCs report
offering to Founders, especially for
network-intrusive hiring and sales
functions
Indication of VCs selectivity in
offering these functions only to the
most successful portfolio companies
In which functions does your VC provide you with support?

12. 14
Founders and VCs opinions differ depending on continent and financing stage
Trends Nuanced Across Geographies and Stages

13. Top 5 Differences between USA and Europe (Founders)
Both share personal relationship / chemistry and speed as first and third most important
Personal relationship & chemistry
Deal Terms
Speed
References from other founders
Track record
Personal relationship & chemistry
General experience of VC
Speed
Operational support
Brand of VC
Focus on VCs’
experience,
brand, and
operational
support
May indicate a premium
US startups place on
signaling through the VCs
they choose to work with
Focus on
deal terms
Perhaps because
European startups are
less dependent on
financing for
operations, as they are
more often
bootstrapped and cash
flow positive

14. Top 5 Differences between USA and Europe (VCs)
European and US VCs share 4 of the top 5 most important characteristics
Personal relationship & chemistry
Brand of Partner
Deal Terms
General experience of Partner
References from other founders
Personal relationship & chemistry
Brand of Partner
Deal Terms
Network / rolodex within industry
General experience of Partner
Factors ranked differently were separated by only a few percentage points

15. Top 5 Differences between Stages (Founders)
Personal relationship/chemistry and deal terms are consistently ranked the highest
Personal relationship & chemistry
Deal terms
General experience of VC
Track record
References from other founders
Personal relationship & chemistry
Deal terms
Speed
Network / rolodex within industry
References from other founders
SEED STAGE – SERIES A SERIES B – C STAGE
Speed is more important for Seed stage and Series A than for Series B – C deals

16. Both share personal relationship / chemistry and brand of partner highest
Personal relationship & chemistry
Brand of Partner
General experience of Partner
Track record
Operational support
Personal relationship & chemistry
Brand of Partner
Deal Terms
Network / rolodex within industry
General experience of Partner
Focus on deal
terms and
industry
network
Indicates early stage
companies have less
negotiating power compared
to VCs
Focus on
experience
and track
record
May indicate a focus on
execution of growth
strategies
SEED STAGE – SERIES A SERIES B – C STAGE
Top 5 Differences between Stages (VCs)

17. 19
Appendix

18. 20
0%
10%
20%
30%
40%
50%
60%
70%
80%
%ofRespondentswithAttributeinTop3
Most Important Attributes for Founders &VCs Founders
VCs
Most Important Attributes for Founders & VCs – Slides 7 – 10

19. Least Important Attributes for Founders & VCs – Slide 7 – 10
21
0%
10%
20%
30%
40%
50%
60%
%ofRespondentswithAttributeinBottom3
Least Imporatant Attributes for Founders &VCs Founders
VCs

20. Support Function Perspectives – Slide 13
22
0%
10%
20%
30%
40%
50%
60%
70%
80%
Talent /
recruiting
Sales / biz dev Finance,
legal, admin,
etc.
Marketing /
Growth
Engineering Design None Other
%ofRespondentsbyFounder&VC
Support Functions Performed byVC, as Perceived by Founders &VCs
Founders
VCs

21. Ranking Differences Across VC AUM Size is Minimal
23
AUM <$300 Million AUM >$300 Million
1 Personal relationship / chemistry 58.3% Same Personal relationship / chemistry 76.0%
2 Brand of VC / Partner 48.6% Same Brand of VC / Partner 68.0%
3 Deal terms 41.7% Close General experience of VC / Partner 32.0%
4 General experience of VC / Partner 34.7% Close Deal terms 24.0%
5 Network / rolodex within industry 30.6% Same Network / rolodex within industry 20.0%
6 References from other founders 27.8% Close Track record 20.0%
7 Track record 22.2% Close References from other founders 20.0%
8 Operational support 18.1% Close Investment sector focus 16.0%
9 Investment sector focus 15.3% Close Operational support 16.0%
10 Speed 9.7% Same Speed 8.0%

22. European vs. US Founders – Slide 15
24
0%10%20%30%40%50%60%70%
Personal relationship/chemistry
Deal terms
Speed
References from other founders
Track record
Network / rolodex within industry
Operational support
Brand of VC / Partner
General experience of VC / partner
Investment sector focus
European Founders (n=75)
0% 10% 20% 30% 40% 50% 60% 70% 80%
Personal relationship/chemistry
General experience of VC / partner
Speed
Operational support
Brand of VC / Partner
Investment sector focus
Deal terms
References from other founders
Network / rolodex within industry
Track record
USA Founders (n=37)

23. European vs. US Founders – Abs. Differences – Slide 15
25
Attribute Abs Difference % Greater Importance For:
1 General experience ofVC / partner 19.1% USA
2 Operational support 9.2% EUR
3 Track record 9.1% EUR
4 Personal relationship/chemistry 7.6% USA
5 Network / rolodex within industry 7.1% USA
6 Speed 5.0% EUR
7 Deal terms 4.6% EUR
8 References from other founders 3.7% EUR
9 Brand ofVC / Partner 3.0% USA
10 Investment sector focus 2.9% USA

24. European vs. US VCs – Slide 16
26
0%10%20%30%40%50%60%70%
Personal relationship / chemistry
Brand of VC / Partner
Deal terms
General experience of VC / Partner
References from other founders
Network / rolodex within industry
Track record
Operational support
Investment sector focus
Speed
EuropeanVCs (n=45)
0% 10% 20% 30% 40% 50% 60% 70%
Personal relationship / chemistry
Brand of VC / Partner
Deal terms
Network / rolodex within industry
General experience of VC / Partner
Investment sector focus
References from other founders
Speed
Operational support
Track record
USAVCs (n=44)

25. European vs. US VCs – Abs. Differences – Slide 16
27
Attribute Abs Difference % Greater Importance For:
1 Speed 13.7% USA
2 Investment sector focus 11.6% USA
3 References from other founders 10.7% EUR
4 Deal terms 10.4% EUR
5 Network / rolodex within industry 9.6% USA
6 Track record 8.6% EUR
7 Personal relationship/chemistry 5.3% EUR
8 Brand ofVC / Partner 3.3% EUR
9 General experience ofVC / partner 0.7% USA
10 Operational support 0.4% USA

26. Early vs. Late Stage Founders – Slide 17
28
0% 10% 20% 30% 40% 50% 60% 70% 80%
Personal relationship / chemistry
Deal terms
General experience of VC / Partner
Track record
References from other founders
Speed
Brand of VC / Partner
Investment sector focus
Network / rolodex within industry
Operational support
Late Stage Founders (n=8)
0%10%20%30%40%50%60%70%80%
Personal relationship / chemistry
Deal terms
Speed
Network / rolodex within industry
References from other founders
General experience of VC / Partner
Track record
Brand of VC / Partner
Operational support
Investment sector focus
Early Stage Founders (n=113)

27. Early vs. Late Stage Founders – Abs. Differences – Slide 17
29
Attribute Abs Difference % Greater Importance For:
1
Brand of VC / Partner 22.6% Late
2
Deal terms 14.8% Late
3
General experience of VC / partner 12.7% Late
4
Speed 11.8% Late
5
Network / rolodex within industry 8.7% Early
6
Track record 7.9% Early
7
Personal relationship/chemistry 7.7% Late
8
Operational support 6.1% Early
9
References from other founders 5.2% Early
10
Investment sector focus 3.8% Late

28. Early vs. Late Stage VCs – Slide 18
30
0%10%20%30%40%50%60%70%
Personal relationship / chemistry
Brand of VC / Partner
Deal terms
Network / rolodex within industry
General experience of VC / Partner
References from other founders
Track record
Investment sector focus
Speed
Operational support
Early StageVCs (n=66)
0% 10% 20% 30% 40% 50% 60% 70% 80%
Personal relationship / chemistry
Brand of VC / Partner
General experience of VC / Partner
Track record
Operational support
Deal terms
Investment sector focus
Network / rolodex within industry
References from other founders
Speed
Late StageVCs (n=31)

29. Early vs. Late Stage VCs – Abs. Differences – Slide 18
31
Attribute Abs Difference % Greater Importance For:
1 Network / rolodex within industry 17.2% Early
2 Operational support 16.9% Late
3 Deal terms 16.6% Early
4 References from other founders 14.2% Early
5 Personal relationship/chemistry 11.9% Late
6 General experience of VC / partner 11.6% Late
7 Track record 10.9% Late
8 Speed 8.9% Early
9 Brand of VC / Partner 6.5% Late
10 Investment sector focus 1.0% Late

30. Thank You. 💪 👊