MPW Next-Gen: The alliance between founders and venture capital

Helaina’s founder and CEO, Laura Katz, described that she undertook about 10 meetings to meet Sita Chantramonklasri, founder and general partner of Siam Capital, which is now an investor. “For me, it’s someone who really cares about the business, someone who cares about what we’re building and who sees this long-term mission,” said Katz, whose New York-based company makes human-protein infant formula. “[And] is aligned with: “OK, this is what the next 18 months looks like and here [are] all the chances, but here are all the risks’ and just being really honest and open and honest with each other.”

Chantramonklasri, speaking at the wealth Most Powerful Women Next Gen Summit in San Diego compared the founder-investor relationship to a three-tiered ladder.

The first step: “We almost have to be like a glorified cheerleader,” the New York-based VC said of investors. “The second part of the ladder is really being an active coach, someone who’s in the weeds with them.” And the third? Join the team by playing a role in the company. “In many ways, if we can keep the North Star of always being on their team, it allows us to prioritize and align to essentially build the company with the founder.”

Panelists were asked if the layoffs now affecting startups, many of which have been pressured by investors to hire, offer any lessons for investors and founders.

Jesse Draper, founding partner at Halogen Ventures, based in Santa Monica, California, called for caution even before the pandemic. “We were living on overvaluations in that weird moment, which were literally balloons with no earnings commensurate with the size of their company,” recalled Draper, whose firm invests in early-stage consumer tech companies founded by women. “Even when I went to COVID I was like, ‘Why are we growing? Let’s build a really great business from a great foundation. Being profitable – we hadn’t heard that word for so many years.” So I have the feeling that all founders are now listening.”

Since they were part of the same herd mentality, some investors may have changed their narrative as well, argued Chantramonklasri. “In many ways, the changing macro environment has also made investors who were previously very enthusiastic, very optimistic, much more conservative,” she said. “It’s actually a change in tone that they expressed to their founders.”

Katz’ conclusion: “You know your business best. And you have to do what’s best for your business, and it’s not always just about hiring a bunch of people.”

Draper emphasized the importance of looking up. “As a venture capitalist, you can’t see the downside,” she said.

“Every business has countless risks and also unforeseen risks that you can’t even imagine,” Draper continued. “At this point, it really comes down to getting to know the founder and knowing that he’s open and upbeat. Venture capitalists should be optimistic, and founders need to be insanely optimistic.”

Lisa Reeves, Chief Product Officer at HR solutions provider TriNet, was a founder and investor. “I never wanted to leave bad news until the end, so as a young company I was always communicating too much,” said Reeves of Boulder, Colorado. “I think raising additional capital as an entrepreneur is difficult, navigating these waters because every investor has different expectations.”

For Chantramonklasri, a strong founder-investor relationship means “being long-term focused and long-term greedy,” she said.

“Aligning not just with your values ​​and your priorities, but also with the schedule and your planned workflow or your relationship or your expected value, that’s actually very important,” added Chantramonklasri. “No founder-investor relationship is perfect. But once you really have that alignment, it makes a big difference.”

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