Load Balancing Between VC Partners

I woke up this morning in Fort Worth, Texas. For the first minute I wasn’t really sure where was I but it eventually snapped into focus. This happens to me periodically when I travel.

I’ve got a stretch where I’m on the road a lot. Fortunately, I’ve got amazing partners. I was reflecting on this over a cup of stale coffee this morning.

One of our deeply held beliefs at Foundry Group is that all four of us work on, and are responsible, for every company we are investors in. We don’t have silos where there are “Brad companies” or “Ryan companies” or “Seth companies” or “Jason companies.” In about 90% of the companies we are investors in, two of us are actively involved. In about 50%, three of us are actively involved. But in 100% of the cases, we all know what is going on, have relationships with the founders and CEO, and can quickly engage and help wherever and whenever we bring something to the mix.

As a result, we’ve always been active at moving primary responsibility for a company (which we define as a board seat) between partners. This is, in effect, a simple form of load balancing that we are all technically aware of from our early investments in some companies that generated, or used, very visible load balancing products before some of these technologies started to become absorbed into the core Internet infrastructure (anyone remember early DNS round robin approaches?)

We have a full day offsite every quarter. One of the things we do is a full portfolio review. Part of that is a load balancing exercise. In addition, we do this exercise as each partner returns from their one month annual sabbatical, as the other three partners have already been handling that partner’s primary responsibilities.

The load balancing process is collaborative. We aren’t randomly moving companies around between us, but rather thinking hard about where a particular partner can help – both in terms of the specific company as well as reducing cognitive load on another partner.

We recently load balanced the companies I was primarily responsible for as (a) my load was excessive and (b) we knew I’d be on the road a lot in Q1. We made a few changes just before I went on sabbatical, talked about it a little more when I returned, and then made a few more changes two weeks ago.

As I sit here a little bleary eyed from the past few days, I realize how powerful this process is at many levels, most importantly eliminating any ego dynamics across the four of us when we think about the portfolio (as the load balancing includes a full range of companies – from those doing extremely well to those struggling.) And, I feel intense relief and satisfaction that I work with three partners who I trust as deeply as I do.

  • Sounds similar to how my consulting firm balances workload between partners. Big difference though is that consulting firm has many more junior folks to shift load to as well 🙂

    • We made a very deliberate decision when we started Foundry Group that it would just be partners. We have no junior folks at all on our team. We believe the founders that we work with want to work directly with us, not with junior folks, so that’s been part of how we’ve built our firm, and how we do what we do.

      • Curious how your partner hiring process was historically without having more junior folks. Do you exclusively bring people on in test roles as Principal -> Partner? Only hire in as a partner directly?

        • Until the end of last year we have never added anyone to the team. So – same four guys from 2007 until the end of 2015.
          At the end of last year we added Lindel Eakmen – our largest LP (representing UTIMCO) to our team to help us execute our Foundry Group Next fund strategy.

  • You didn’t go for the typical partnership structure, and it certainly seems to be working for Foundry at many levels — professional and personal.

    BTW, I loved the piano in the picture from your hotel room you posted on Twitter. They must have given you some sort of artist suite, I’m guessing.

  • You can’t delegate without trust. Trust you must build!

  • This is a very rare perspective and process that I haven’t seen formalized at other VC firms – just one more way that Foundry has learned and refined its approach over time. Keep shaking it up Brad!

  • Do you ask for the entrepreneur’s permission before you switch out the point person for their company? When you do the initial investment, do you tell them that their “go-to” partner at the firm may, at any point, be any of the four of you and not necessarily the person who takes the board seat at the outset? I’ve heard entrepreneurs sometimes complain that they raised money from a firm thinking they were working with partner X, and then they get passed over to a different, less busy partner after some number of board meetings. There’s one firm in particular that I think is notorious for doing this — bait and add, with the baiting being done by the most famous partner. Even among full partners (i.e., no associates), entrepreneurs might still have a preference for one person in particular — in this instance, how do you “load balance”?

    • We are clear in advance of doing any investment that all four of us work on everything. We are also public about our load balancing, as in this post, and we do it often given our vacation and sabbatical rhythms.
      If someone strongly objected we wouldn’t make a change. But no one ever has and most people realize they get more constructive focus and attention when we do this, rather than less.

  • When I read this, (1) I nod my head in agreement and (2) a reason venture doesn’t scale.

  • I’m curious if you share how many portfolio companies you have. Has it gotten to the point where the number of companies has evened out, or does the number continue to grow?

    (Just wondering if the pace of new investments about about equals the number of companies that leave your portfolio in a given time period)

    • We have around 60 active companies. It continues to grow, but more slowly as we have plenty of companies exiting on a regular basis at this point.

  • mark gelband

    Have you found meaningful ways to push these practices down to the executive teams and lay staff of the companies in your portfolio? Semil Shah says below: a reason venture doesn’t scale. To me this post isn’t as much about venture as it is about organizational leadership, values and practices that improve people’s lives and the chances for success.

    You and your partners know it is in each other’s best interests to value the whole person, families, relationships, physical and mental health. I’m confident that these organizational values are metrics for success.


    • We encourage this broadly. My friend Jerry Colonna and his team at Reboot.io does a masterful job of helping founders and execs with this.

      • mark gelband

        Thanks. The practicality becomes more challenging as an organization grows. Do you encourage with your support staff at Foundry as well? And how?

  • Josh F

    Brad, this sounds helpful for keeping VC partners sane, but perhaps disconcerting to founders who are used to working most closely with the original VC board member. How do you think these regular shifts have impacted your relationships with your investee companies over time?

    • I think it’s made the relationships stronger. The initial board member is still involved / available and we are very open with founders we invest in that all four of us work on everything together.

  • Why Fort Worth?

    • Several meetings there.

      • From what you have wrote about your wife and partners, you definitely hit the relationship lottery.

        • mark gelband

          seems to me that we have the power (and responsitiblity) to make our relationship lotteries.

  • DaveJ

    You always get better service in restaurants where they pool tips. Not really much different.

  • Dennis

    Does this also make the relationships stronger between the partners and the founders? As a founder myself i wonder where the balance is.

    • Based on the feedback we’ve gotten, it definitely does.