Comments on: It’s Not My Company

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By: Finance Geek » Mistakes that startups make

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By: Steve Woda

Steve Woda — Sat, 31 Oct 2009 16:55:05 +0000

Good post Brad.

I haven't heard this one too often, thank goodness, but of course it has to affect the people working 24/7 to make the business successful. Professional managers/leaders know that it is critically important to get their team to take ownership…. to be proud of their successes, and to take responsibility for their inevitable stumbles. Professional managers/leaders try to dish out all of the credit to the folks that work for them because this is what keeps people working 24/7 for less-than-market salaries. VCs are actually managing and leading folks as well, and that is why your post should be interesting to folks.

We all need to remember that as leaders, our jobs are to inspire and teach. When we forget that, we can't manage or lead very effectively.

Again, nice post Brad.

By: Glenn Matthews

Glenn Matthews — Tue, 27 Oct 2009 03:55:06 +0000

I totally agree with MichaelSheeley. If an investor refers to a company I've founded as "my company", then I'm excited that they are married to the company and it's future. However, there are always those investors out there that when they say "my company" they mean it with conviction, so much so that they want to dominate.

Being proud of an investment is plausible, being controlling is not.

Great post Brad.

By: Joseph Logan

Joseph Logan — Mon, 26 Oct 2009 23:00:35 +0000

Take your points as well, JGB (isn't civility a wonderful thing?). The fact that there are 43 replies on this thread, though, and that Brad wrote about it in the first place tells me it might not be so silly to scrutinize it after all, though I think it would be silly to obsess about it. Perhaps it's the way "my company" is expressed.

There are two reasons I think it isn't silly to scrutinize this:

1. Employees in a company can be motivated and demotivated by the behavior of the funders. If I have invested months/years of my life and sweat equity into a company and a guy who bought 18% six weeks ago called it his company, I might not say a word, but I might take it as a subtle cue about who's running the show. Again, whether it's true or not, perceptions matter. This comes up in talks with the founders I work with.

2. More to my own background, when I was the potential buyer for commercially-oriented start-ups, I listened closely for cues about who makes decisions and what the relationship with a company might be like. Were I to hear that those at the center had anything less than complete psychological ownership, I wouldn't take the chance on them (and I have been in that situation). If an established business takes a chance on a start-up, they need to know whose company it is and what that person's integrity is. They want to know that the company will be there, and that it will follow through. It's the founder and team that convey that. Again, it might not matter to some, but the language creates a perception that leads to an action. It's subtle but important.

By: JGB

JGB — Mon, 26 Oct 2009 22:28:09 +0000

Joseph, I certainly take your point but think about what you're suggesting. The issue isn't that VCs talk to a founder and describe his/her business as "my company". Even the most egotistical of the pack wouldn't be that offensive. The issue is when talking to someone not involved in the business that VCs often talk about "my company". In this context its nonsensical to use "we" or "our" unless the CEO or entrepreneur is standing next to you (which they hopefully are not most of the time).

Someone may have used this analogy already; but if I was an entry level software engineer or bench scientist at a start-up and the company successfully raised a bunch of money, you would have no problem if I told a friend or a group of people that "my company" raised a $XXM. What's the difference here? Again, its really very silly to scrutinize this.

By: Joseph Logan

Joseph Logan — Mon, 26 Oct 2009 20:58:29 +0000

What you know isn't necessarily what others see. If you're being constructive, "we" and "our" are very good words to use, and they do make a difference. Whether you read into it or not, others do–not least the people who work to build the company you're funding.

By: JGB

JGB — Mon, 26 Oct 2009 17:47:25 +0000

You're taking the phrase out of context. There is no implicit arrogance or overinflated sense of self importance when a VC says "my company". We know exactly how much we own and we know we are usually far from the most important player. Within a partnership, while we share in each other's successes and failures, we each take ownership and responsibility of our own portfolios. It's within this context that "my company" makes perfect sense. Outside of partner to partner discussions we're really saying "my [portfolio] company". It's really kind of silly to try and read into it beyond this.

By: Concerned LP

Concerned LP — Mon, 26 Oct 2009 14:43:01 +0000

VC's also need to remember that it is not "my company" because it's not "my money." Too often, VC's forget that the money you manage is not yours, but is students (endowments), charities (foundations), retirees (penioners), and individuals. So ownership of a company is further removed from a VC b/c it is 1) not your company and 2) not your money. We need a serious attitude check in the VC community. The arrogance (often, not always) is tiring, particularly when 98% of VC's have done nothing for 10 years, regarding returning some of that money to your investors.

By: Phil Sugar

Phil Sugar — Mon, 26 Oct 2009 13:44:54 +0000

I think its all in the delivery.

Somebody posted a while back that it took them less than a minute to figure out what kind of VC they were talking to: One that viewed themselves as one part of the entrepreneurial community, and the other that viewed themselves as an emperor that because they had the money everybody needed to bow in their presence.

So in one case its like saying: "we won" when your favorite team wins.

And in the other its as offensive as referring to a person as a piece of property.

I have no doubt what kind of VC Brad was talking to.