Apr 16 2019

That Day When Your VC Tells You She Is Leaving Her Firm

There are some blog posts that every entrepreneur should read.

Hunter Walk at Homebrew recently wrote one of them.

It’s titled Oh Shit, Your VC Just Quit Her Fund! What a Good CEO Should Do Next.

He covers three cases:

  • Bullish aka You Are Absolutely Killing It
  • Written You Off
  • Too Early To Tell – Some Good Stuff, Some Challenges But A Lot To Do

The real gold in this post is in the Too Early To Tell category. Hunter has a great lead in:

Here’s where I think founders and cap tables should be more proactive. The default is to let the firm assign another person at the fund (hopefully a GP) and then just keep working on the plan of record as if nothing changed. My experience suggests this will be neutral to negative long term, unless you end up in the “killing it” camp by next fundraise.”

Hunter’s notion that founders and the CEO should be proactive here is right on the money.

At Foundry, we periodically load balance our boards. This is a different phenomenon than the one Hunter is talking about, although we’ve learned to be clearer about what we are doing when we are doing it. I recall a personal low point when a founder/CEO who is a close friend asked to go for a walk and started the conversation with “You could have told me that you were leaving my board in a more graceful way than a one paragraph email.” Very true.

The lesson once again is things change, communicate clearly, and be proactive.