Orphaned Investments

There are two intertwined things that entrepreneurs and their companies get from VCs – money and attention. You need both. And they feed on each other. Attention begets more money if necessary. And more money is usually necessary. Everyone always underestimates how much money a startup will require to get to breakeven and how long it will take. That includes the VCs. And we should know better. But entrepreneurs are even more guilty of seeing the light at the end of the tunnel when it is actually a train coming.

Which brings me to the subject of orphaned investments. Of all the bad things that VCs do on a regular basis, and that list is long, orphaning their investments is at the top of my list of bad behavior. I have never done it. I’ve wanted to. Trust me. I dream of doing it. But I won’t.

And the reason I won’t do it is that I have lived with the costs. I have sat on boards where two or three of the seats are vacant at every meeting. I have put together rounds where two or three of the syndicate members won’t participate. I have sat with an entrepreneur and explained that life is not fair and it is what you do after you realize it that really matters.

Orphaning an investment is when a VC firm decides that it doesn’t really care about an investment any more and stops paying attention. The primary cause is when a partner leaves a firm and nobody picks up coverage of his or her investments. The VC firm says that “so and so” is covering the investment now. Yeah, if you call reading an occasional email “covering.” But it can also happen when a VC loses interest in an investment they made and causes their firm to lose interest as well. It’s easy to not care about an investment if your partner who made it doesn’t care anymore.

And this brings me back to the link between attention and money. If you aren’t getting attention from a VC, you aren’t going to get money from that VC either. When a VC writes off an investment, either emotionally or literally on their schedule of investments, they are closing their wallet to it too. This rule works in bull markets and bear markets. But it is more painful for entrepreneurs in bear markets.

So how do you avoid being orphaned? Like most things, it comes down to picking your partners carefully. Ask around. Find out how they have acted in tough situations. Find out how solid the VC’s position is in their firm. You need to reference both the partner and the firm. The person is important but if they leave you will find out a lot about the firm.

This is the kind of post that after I write it, I get a ton of inbound email saying “you are talking about this company”, “you are talking about this VC”, “you are talking about this VC firm.” So I will say right now that this post is not about anybody, any firm, or any investment. I have been thinking about writing this post for months. I have nobody in mind right now. Other than entrepreneurs and their companies out there that are orphaned, or are going to be orphaned.

You can survive being orphaned. But it will require rebuilding your investor syndicate, it will require the other VCs involved to increase their support and attention, and it will require you to forget about life being fair and get on with it. Getting orphaned is not a time for feeling sorry for yourself. It is a time for doing something about it.

#entrepreneurship#VC & Technology

Comments (Archived):

  1. jason wright

    ‘orphan’Origin: late Middle English: via late Latin from Greek orphanos ‘bereaved’.P.S. what’s with the koala bear sponsored link?

    1. fredwilson

      i was trying out some new ad products from disqus. didn’t like it so i took it down.

      1. jason wright

        i didn’t like it either. good move.

      2. awaldstein

        Make a decent post topic. Not necessarily about D but about whether it its the targeting or the quality of the ads that make this work.On Facebook, its the ad quality that is driving the sales on top of honestly some pretty basic targeting.Or so it appears.

  2. William Mougayar

    This post is full of wisdom. I think each entrepreneur should read it to the letter.But what do you do when it’s the VC that starts by “poisoning” the relationship for a variety of reasons, which leads to the startup deciding to lose a parent, vs. the VC losing a child? That can happen too, and sometimes the startup can still do well without that particular support, but sometimes they don’t and it becomes a spiralling kiss of death.

    1. fredwilson

      that is tough. you might try to find a new sponsor in the firm. but that won’t be easy.

    2. jason wright

      adoption agency

      1. JimHirshfield

        Fosterpreneur Home

    1. fredwilson

      yup. that is more or less the conversation

    2. jason wright

      a very weak negotiating position

    3. Chimpwithcans


      1. Donna Brewington White

        That’s right! Without shame! You don’t ask, you don’t get.

        1. Chimpwithcans

          ha ha…true…it’s also the next line in the movie 🙂

    4. Vasudev Ram

      Oliver Twist: https://en.wikipedia.org/wi…Wow, remember seeing that movie as a kid. Though I’m not into Dickens’ novels as a rule, this one was touching. The Wikipedia article also says:[ Oliver Twist is notable for Dickens’s unromantic portrayal of criminals and their sordid lives, as well as exposing the cruel treatment of the many orphans in London in the mid–nineteenth century. ]

      1. Vasudev Ram

        Off-topic, but Ben Hur is another fantastic movie – both for the dialogue and the action.Again from the Wikipedia article:[ It was the fastest-grossing as well as the highest grossing film of 1959, in the process becoming the second-highest grossing film in history at the time after Gone with the Wind. It won a record 11 Academy Awards, including Best Picture, Best Director (Wyler), Best Actor in a Leading Role (Heston), Best Actor in a Supporting Role (Griffith), and Best Cinematography, Color (Surtees), an accomplishment that was not equaled until Titanic in 1997 and then again by The Lord of the Rings: The Return of the King in 2003. Ben-Hur also won three Golden Globe Awards, including Best Motion Picture – Drama, Best Director and Best Supporting Actor – Motion Picture for Stephen Boyd. Today, Ben-Hur is widely considered to be one of the greatest films ever made, and in 1998 the American Film Institute ranked it the 72nd best American film and the 2nd best American epic film in the AFI’s 10 Top 10. ]

    5. Donna Brewington White

      Thanks, Jim. I was already tempted to have a good cry after reading this post!Personally, not an “orphaned investment” but being an entrepreneur, tech startup founder or otherwise, is a lonely, hard business so I can empathize with the founders of those startups that Fred describes.Fred’s words hit home: “Getting orphaned is not a time for feeling sorry for yourself.” [Nor any setback, I would add.] “It is a time for doing something about it.”Let’s see what we’re made of. Game on.It doesn’t hurt that I had my coaching session with @JLM:disqus this morning. Everyone needs a coach!

      1. JimHirshfield

        Well played Donna, well played.

    6. LE

      I gotta admit that it’s pretty sad that with all of the high quality comments on the blog today (including sniff my own) that a meme like this is the top voted ‘comment’.#rainontheparade

    7. Twain Twain

      It’s the Mr Brownlows (investors with integrity and genuine altruistic intent) that founders need to be able to identify and engage.Not the Fagins and the Mr Bumbles. It’s the difference between “smart money” vs slavery and begging bowl.

    8. William Mougayar

      No sound or clip to go with that?

    9. Lynn

      good pic.

  3. Twain Twain

    In one quarter I wrote down $15 million because some of the Managing Directors, who’d led the initial investments, decided to “switch off”.I must have handled the process with decorum because the founders of one company later approached me to join their new startup.It’s a horrible feeling to know a company isn’t going to make their next milestone and will be burning cash to try to get there and there’s little you as the investor can do to operationally, hands-on, steer their ship.Market conditions are against both the investor and the investee, and the investor has no mandate to write and execute the business plan. They’re there in an advisory rather than operational execution capacity.

    1. pointsnfigures

      Don’t anchor on a particular valuation. Much better for the culture to take the write down, lay off employees that aren’t essential when the choice is between that and going out of business. As Heidi Roizen wrote: Going out of business is bad for culture too.

      1. JimHirshfield

        You keep misspelling her name 😉

        1. pointsnfigures

          thanks for pointing that out. I apologize to her. Will fix. FML.

          1. awaldstein

            Great entrepreneur and an old friend of mine.She and her mother started Tmaker and when I was selling gazillions of CDROMs i was her distributor at creative.

          2. Vasudev Ram

            What was TMaker? A software product of some kind? I remember reading about the name way back, in one of the old (print format) computer magazines.Never mind, found it:https://en.wikipedia.org/wi

          3. awaldstein

            You got it.The strategy for selling Sound Blasters (we sold 87m of them plus oem in my tenure) was to invent the multimedia upgrade kit (a cd), bundle it with Windows ext (largest Microsoft distributor for a time) and bundle it with light games and trial products.Tmaker amongst many other was one. Also developed an publishing company as we built a developer org of some 3700 software developers.Was a fun gig.

          4. Vasudev Ram

            Whew. Does sound fun. I remember hearing a lot about the Creative SoundBlaster back then, though I never had one myself.

          5. awaldstein

            Was a ride. From zero to $1B in four years.From a bag full of developer applications to a huge community.From not having a general ledger to going public 9 months laterAnd of course reporting directly into Asia and being responsible for US and Europe.Cool times.

  4. awaldstein

    One of the great ones Fred.I read it two ways:-Choose your partners carefully as in business as in life there are tough times and just really bad days. Fair weather anything is a non starter.-If you have no attention you will not get additional funding. Sage advice to the sales people that we all must be.

  5. JaredMermey

    Can board seats come with 2-way terms? Almost an SLA for the board member? If s/he does not keep his/her commitment then they lose the board seat (and if you believe money talks then perhaps lose preference on payouts).

    1. fredwilson

      yes, but that doesn’t solve the problem of being orphaned.

      1. JaredMermey

        Loss of preference might reduce likelihood of someone orphaning their investment. If the board seat is replaced, then attention can come from a different investor (who might provide the future money),Not a perfect solution…though short of perfectly predicting who loyal investors/board members will be I am not sure what is.

      2. Girish Mehta

        Seems like Deal by Deal Carry might increase the likelihood of being orphaned…?

        1. fredwilson


  6. LIAD

    Everyone is motivated by self interest. Pick a VC who’s self interest equates solely to financial upside – things don’t go as planned, VC goes AWOL.Pick a VC who’s self interest is financial upside, and maintaining their name, brand, integrity, and decency less likely to just be fairweather friends.The rub is a startup orphaned by a single investor is probably more likely of being orphaned by the others too.

  7. andyswan

    It’s a hard knock life for entrepreneurs that don’t get traction quickly enough

    1. Bruce Warila

      the Annie video isn’t showing in my browser

  8. Twain Twain

    Founders are similar to actors in that both experience and get to know rejection well, and they have to get over whatever ego/id they have about it.

    1. JimHirshfield

      “Remember: there are no small parts, only small actors.”- Constantin Stanislavski

      1. Twain Twain

        So true. Although in a different field from founders and investors, Mother Theresa has much wisdom for us,

  9. William Mougayar

    “Life is not fair and it is what you do after you realize it that really matters”Golden advice. Keep doing that, until life becomes fair to you, as it will.

  10. pointsnfigures

    I always tell entrepreneurs to try and find companies that failed and ask them how their investors behaved. Did they fight for them? Were they available? Did they continue to try and make connections for them? Did they try to find talent for them? I believe we talked about this when Canvas failed.One thing that will be interesting to see play out from my perspective is this: We have had a lot of new investors enter the market since 2010. It might be the first time they are investing their own money-they might have been successful being a joiner in another startup-but they probably didn’t have their own money on the line.The emotions you feel are a lot different when it’s your actual cash; and not just your equity value being lost. Big difference. I can remember waking up in the morning, looking at the board and knowing before the opening bell that I was going to be out $100k that day. Made my coffee taste a lot different. It fucks with your head, and even affects you physically.Success isn’t determined on how you ride your winners. That’s a first world problem. Success is how you get out of and manage your losers. Manage them in the right way, they might turn into a winner.There are a lot of VC funds where partners don’t have their own money on the line. I think that changes their attitude toward the companies they invest in.I also loved Heidi Roizen’s Tumblr post from yesterday. http://heidiroizen.tumblr.c

    1. Jason T

      “I always tell entrepreneurs to try and find companies that failed and ask them how their investors behaved. Did they fight for them? Were they available? Did they continue to try and make connections for them? Did they try to find talent for them?”You know, this really is one of the most important thing a founder can do. Because odds are, your startup will be in the verge of death so many times. And odds are it’ll actually die eventually.Has anybody created a place where founders can honestly and anonymously share their experiences? I’ve had some great investors. And some that were absolutely assholes. It would be nice if entrepreneurs had a platform for sharing that information.

      1. Donna Brewington White

        Wasn’t that what The Funded was trying to do?

    2. LE

      Great comment.Big difference. I can remember waking up in the morning, looking at the board and knowing before the opening bell that I was going to be out $100k that day. Made my coffee taste a lot different. It fucks with your head, and even affects you physically.What’s interesting about this is that I don’t have that kind of effect with money (even large amounts) but I do have it with people. Particularly letting people down even in something that is small and inconsequential business wise. With money losses I am able to totally detach myself emotionally it seems.Success isn’t determined on how you ride your winners. That’s a first world problem. Success is how you get out of and manage your losers.This reminds me greatly of my theory on relationships. You know that they are good when you have developed a way to handle disagreements and conflicts in a fair manner to both parties. It’s easy to get along when there is nothing to fight about and/or no problems to deal with. How and what you fight over and how you handle the disagreements is really key to a long term associations of any type. [1] Note that “fight” doesn’t mean “fight” either, I really mean disagree the problem is it turns into a fight if one or both of the parties isn’t reasonable in some way relative to the other participant.[1] This is always why it bugs me to no end to hear people talk about how similar they are in things they like to do vs. how they relate to each other on a day to day basis and the values that they share.

      1. RichardF

        Even better comment

    3. Twain Twain

      Great insight, thanks. Before, when I worked in startups it wasn’t my $ and then when I was an investor it was UBS’ $.Now, it’s my $.The funny thing is that all 3 experiences are different and they help to modulate my attitudes and behaviors towards $ and how to define VALUE and understand why each party sees it differently.

    4. Sebastian Wain

      Personally, my three experiences with investors’ attention (one as an entrepreneur, one as an angel, and one as a shareholder) were disastrous but I think this is pretty common so I take it easy and think that the good kind of investors described by Fred are outliers.

    5. JamesHRH

      Your definition of success is terrific, if thinly held.80% of VCs judge their success based upon their winners, I would think.

    6. creative group

      pointsnfigures:enjoyed the line Heidi Roizen used (valuation nostalgia).How many social media formats do you subscribe/read/participate in?How do you find time to work? (Independently wealthy dummy, duh)Thought about Heidi last name. It included ROI. Great term in business.

    7. Donna Brewington White

      Thanks for the Heidi Roizen post. A great companion to Fred’s. Was a much needed stiff drink.Appreciate your comment as well. A lot.

    8. PhilipSugar

      I believe there is a fate worse than being orphaned. While it sucks when an investor bails on you it’s not the worst thing that can happen..It is dealing with a flailing investor. That will literally drain the life out of you.I know they say the opposite of love is not hate, it’s indifference, but in this case I disagree.If an investor bails on you, they stop coming to meetings, you aren’t getting any more money. Ok, by definition you don’t have to deal with them, they are gone, move on.What is worse is when you have an investor that comes to meetings, is toxic, full of fear, wanting replace everybody, pitting people against each other, undermining you, causing: “Made my coffee taste a lot different. It fucks with your head, and even affects you physically.”

  11. Semil Shah

    At the Series A and beyond level, these are deeper relationships. At seed, orphaning occurs but also can go both ways. There are cases where the founders don’t care to communicate with their investors or syndicate, and then it becomes harder to spin up a good conversation. That’s the nature of seed as there are more investments and less attention, but wanted to briefly share the other side in that sometimes the causes for it aren’t one-way.

    1. Pranay Srinivasan

      Strictly financial investors off Angellist and suchlike at Seed stage esp in syndicates / party rounds cannot be expected to “add value”. Only 10-15% of seed investors care about the company anyways. And after note conversion, *EVERYONE* except for the follow on investors disappear.

      1. Semil Shah

        Yeah, directionally true.

    2. William Mougayar

      True, especially if there were several angels involved. A triage of relationships follows. But I think Fred was focusing on VC-type of relationships that start with a long term intent. Angels/Seed investors don’t always have long term intent or capabilities to follow throughout.

      1. Semil Shah

        Yes, was only pointing out seed, and also in today’s environment of so many startups, orphaning happens more and more.

    3. pointsnfigures


  12. LE

    Which brings me to the subject of orphaned investments. Of all the bad things that VCs do on a regular basis, and that list is long, orphaning their investments is at the top of my list of bad behavior. I have never done it. I’ve wanted to. Trust me. I dream of doing it. But I won’t.You could read this as honorable or you can read it as “I will go down with the ship even if it kills me personally”. What I mean by that is it puts a great deal of stress on you which is not good for you and anyone that you are around. I don’t think there is anything honorable in that. It’s like the detective in those movies who ends up smoking and drinking to solve the big case and gets divorced from his wife and ruins his health. Great. Nice job. You helped some stranger get justice at the cost of your family and future.Get my point? Perhaps what the other VC’s do is not so much dishonorable but it’s a survival technique. Maybe it’s important to be selfish. Different people have different levels of stress they can deal with.You know all of these people will not be around to clean up the mess in your life (if there is ever is one that is) if you have health problems as a result of not doing what your body might be telling you to do. As evidenced by “I’ve wanted to. Trust me”.This was the basis for Joni Mitchell’s song about David Geffen “Free Man in Paris”.The way I see it, he saidYou just can’t win itEverybody’s in it for their own gainYou can’t please ’em allThere’s always somebody calling you downI do my bestAnd I do good businessThere’s a lot of people asking for my timeThey’re trying to get aheadThey’re trying to be a good friend of mineI was a free man in ParisI felt unfettered and aliveThere was nobody calling me up for favorsAnd no one’s future to decideYou know I’d go back there tomorrowBut for the work I’ve taken onStoking the star-maker machineryBehind the popular song

    1. Simone

      I think you have just defined the big dilemma in anyone’s life who was born with some fire of entrepreneurship and exploration – who to be? The guy/girl who goes down with the ship or the selfish guy?That light will prove to be the train more often than we like, but someone has to do it, and thousands of people endured so that you and I can now communicate via net instead of hiding from cold and beasts in a cave. I don’t think there are many stories of easy success, innovation and art. I remember from what I read they are less than fair too. But I do disagree it is better to be selfish and just wait for retirement in a domestic bliss. Which is probably less probable than having success in business or similar endeavours (you seem to indicate the selfish alternative is guaranteed, perhaps if that was true many more people would opt in rather than opt out).Plus, I don’t think people who are very involved, do it for the others, it is the way they need to live and work.

      1. LE

        The guy/girl who goes down with the ship or the selfish guy?It’s not one or the other (black and white). It all depends on the circumstances. That’s obvious. One thing I almost never “bend over” for is the societal or family/friends pressure to act or be a certain way by some value system that will not be there when you need it, if, and this is super important, to clean up your mess in life. [1] [2] Better to take care of yourself first. Then when you are able to, help others if you can and desire to do so. No pressure and if you don’t you are not a bad person and if you are a bad person so be it.you seem to indicate the selfish alternative is guaranteed, perhaps if that was true many more people would opt in rather than opt outI didn’t say that. And it’s not (to repeat) one or the other. Each person and what they can do is different. To me buying cars and negotiating is sport and is fun. To others it’s the most dreaded experience in the world. Each of us handles things differently.My comment was based on Fred saying:I have never done it. I’ve wanted to. Trust me. I dream of doing it. But I won’t.Had he not said that, I wouldn’t have written what I wrote. If your body or your mind is telling you something you may want to reevaluate the reason you are having cognitive dissonance. (Apologize if that is the wrong use of the concept..)[1] I can in fact remember countless times when I didn’t do what others wanted me to do at a particular point in time (particularly with my time) and all of those people are not even around anymore. I always thought “they will not be here for the downside and they only want the upside now from me”. (Life, not investments). So you go with your gut and block out the noise.[2] An example is “this person died (could be relative, could be acquaintance) and you should really be there and go to the ‘shiva’ every night”. Forget who the person is in this case. The bottom line is the person who is telling me what to do is going first by their value system and what matters to them and their fears of being a social outcast, and 2nd they will not be there to clean up my mess later. They don’t know what is going on in my life. Hence what they think is not going to sway me (ie “you should” is meaningless to me). You are only as good as the last thing you did for people the minute you don’t follow on you are shit.

        1. Simone

          Your reply.. you are negotiating!:) your initial post was unequivocal. You are voting for scenario B but have lived your life by scenario A, otherwise you wouldn’t be in a position to contrast the scenarios :). If only I knew how to negotiate, who knows where I’d be now. That’s why I like technology, there’s something honest about it – it works or it doesn’t work, solves the problem or doesn’t solve the problem. So you are happy if you outsmart someone, you like that someone has to lose, or get less than he should have, just because he is a bad negotiator. Some good people are bad negotiators, but perhaps this is a hypothesis that you reject. I also don’t really believe good negotiation can be learned, it seems more build in personality rather than an acquirable skill.Back to Fred. In another context, I agree that we should go with what our body is telling us, but in this context I think Fred wanted to reinforce the message, not really meaning that he would have quit. it is that human feeling on a bad day, and the next morning we start all over. This is his job and none of us in our jobs have an option to give up (not formally acceptable), unless we formally quit.

          1. LE

            Your reply.. you are negotiating!:)That is probably closer to selling. But of course selling is also part of negotiating so…there’s something honest about it Ah! So you are implying there is something about negotiating (or selling) that is not honest! That definitely can be the case. However there are certainly situations where you are not honest in life (other than programming). You are not going to tell your aunt she looks fat in a dress, are you!So you are happy if you outsmart someoneYes. Definitely. But I am also happy when I write a little shell or perl routine to automate some process that I am dealing with. That gets me almost equally as excited (and usually doesn’t directly put money in my pocket).I also don’t really believe good negotiation can be learned, it seems more build in personality rather than an acquirable skill.Well kind of true. Although I have been able to teach a few people. But generally you are either a dolt and dull in this area or you are not. That said I learned by trial and error (pretty quickly actually) and by observation in the world. It takes a great deal of sensitivity to manage the nuance of things. To your point, some people just don’t have that. I can sense things that you might not even be able to. A tone, a reply, words and so on. A big advantage. So I know what I can do and what I can’t do. It’s a sense in other words. That part can’t be taught. But it could be in someone just needs to be brought out.This is his jobWell let’s stipulate that he doesn’t need the money. Let’s further stipulate that he is in a sense a prisoner to the next big thing in order to continue being who he is. That is a huge pressure that has nothing to do with money. That can create a great deal of stress!

          2. Simone

            you are a river! and a programmer, that’s unusual. it is exactly this sense that makes me find negotiation unappealing, realising that someone has room for manoeuvre and will test me whether I like it or not, so I think negotiation is more about competing, naming winners and losers.we choose our prisons..

  13. Jaikant Kumaran

    Fred your blog is such a wealth of knowledge. Would buy it in book form from amazon for my kindle without a second thought. Anytime soon?

    1. Simone

      the long form on this blog are the comments 🙂

      1. Jaikant Kumaran

        With the emotion and drama packed in, makes for a great read!

        1. Simone

          true :), but I think it has a lot to do with being a ‘live stream’ rather than a book. so you will have to come back here for the fun

  14. David Waxman

    I agree that doing diligence on investors and picking the right partner is the most important thing. After that, though, there is a lot a founder can do to keep an investor engaged. It’s easier to lose interest in a company if the CEO goes silent. Call your investors, give them regular updates, ask for help. This won’t weed out all the bad apples, but it will help keep the ones who are teetering stay on the right side of the wall.

  15. Pranay Srinivasan

    VCs who orphan their investment for WHATEVER reason should be liable for their board seat for a minimum of 3 years and a portion of the stock they bought should go back to the pool for every month they abandon their investment. Just like when an employee leaves, unvested stock goes back to the pool.How is it FAIR to the other VCs who rolled up their sleeves to deliver a return to a cowardly VC who doesn’t have either the conviction or the capability to stick with her investments in the worst of times?

  16. Asim Aslam

    I’ve attempted to write a comment a few times now but emotions seem to take over. This post and personal experience make me loathe raising money. Luckily the longer I go, the less and less likely it seems that I’ll do it. Product/Market fit, organic growth, revenue and profitability. Beautiful.

  17. Sam

    Seems like there are two things at odds here, the other thing being the power law of VC returns across the portfolio, which would suggest that orphaning much of your portfolio is rational behavior as you focus on your out-sized winners.If that’s true, then orphaning must be the norm for VC behavior. Only reasons I can see why a VC wouldn’t want to orphan some of their portfolio is 1. professional reputation, or 2. they really do give a shit about their entrepreneurs.This blog is a huge investment in your brand, Fred. And I’ve been here long enough to see your consistency and that this is real. As JLM would way, well played.

  18. JLM

    I was going to write a longish comment but then I remembered Freddie’s admonition, so, here’s a short one:”Never get mad at the money, it will change its mind.”The corollary is:”Never fall in love with the money, it will change its mind.”Like any relationship the value is proportionate to the invested energy. The second that energy disappears, it’s a long gone girlfriend whose face you cannot quite remember. And, she’s got a new boyfriend and it isn’t you. You think you can smell her scent on your pillow? She doesn’t even remember how to spell your name, pal. Alas.You have to work these relationships to ensure that the spark stays alive. Buy the VCs flowers on Valentine’s Day and their birthdays understanding while this is YOUR LIFE, this isn’t even THEIR money.[OK, you do understand this is like a metaphor, right? I really am not recommending sending flowers to your VCs but you got that, right?]YOU HAVE TO WORK THESE RELATIONSHIP LIKE THEY ARE OXYGEN, WATER, FIRE. Or, pistachio nuts if you love pistachio nuts as much as I do.Life isn’t fair.Not even close but you can work it and shape it and manipulate the Hell out of it. Do not rely on luck to bail your ass out, friend. Make you own damn luck, can it, open those cans from time to time. Work you deal. Make your own luck.Don’t let me hear that you went to a meeting with your backers and didn’t send them a hand written note.This is also why you raise 24 months of runway when your VC pals are telling you to raise 6 months of runway. Cause this stuff changes quick.JLMwww.themusingsofthebigredca…

    1. Simone

      everyone loves you when you win, or what is the saying.perhaps it is also a VCs tactic to distance themselves from failure as to not be associated with it. no amount of flowers, calls, pistachio ice cream and wooing will replace success, but could enhance it, provided it happens

  19. Pete Griffiths

    Painful but true.

  20. Alex Malorodov

    Great post Fred, thank you. I feel that for referencing the firm and the partner, it may serve the founders well to reference both current and past employees/affiliates (and this applies to any career search more broadly). Current employees are more likely to give you a positive impression of their firm since critiquing a current employer may not only be damaging to one’s reputation, but also may also make the employee admit to themselves that they made a poor choice in pursuing their job. And people don’t like to feel bad about themselves. I have found that past employees tend to provide more realistic feedback, or at least provide an additional useful data point in your assessment of a given company.

  21. David Fleck

    I’ve had the honor of working with @fredwilson in one of his portfolio companies for over four years. I’ve also gotten to know the rest of the USV team. USV is high profile and people often ask me why are they so successful. This post summarizes a huge reason. Their reputation is they are in it with you til the end. Like a marriage – for better and for worse. There are very few firms that have that reputation (within firms, some partners do, but that’s a different matter). That consistency of approach is a huge differentiator in market. They invest their most valuable resource – time. This is the long term perspective. VCs that orphan companies are also orphaning the founders and management teams that will start the next wave of companies, and will not be called on to participate in them.

    1. JLM

      .Strong. Stronger than an acre of garlic.JLMwww.themusingsofthebigredca…

      1. LE

        Stronger than the odor of an illegal crossing the border who hasn’t showered in 3 weeks.(In honor of the stupid shit that the Pope said today..)

        1. JLM

          .The Pope lives within a walled enclave guarded by Swiss guards who carry weapons at all times.In addition, the Carabinieri are deployed on the other side of HIS wall.The Pope can call me when he knocks down his wall.Pope Francis, knock down that wall — said NOBODY ever.JLMwww.themusingsofthebigredca…

          1. LE

            When he came to Philly they closed the entire center city to inbound traffic for 3 days. No cars inbound and if you left you couldn’t get back in. Workers had to be given off work and restaurants who thought they would do big business had no customers. Was a total clusterfuck of “not on my watch” by the powers. The pope of course was ignorant of all of this. I guess. Or he apparently had no sensitivity to what everyday people (who are not living in slums?) have to deal with. I had servers in colo in the city and if there was a problem there would be no way to access them (they are at a carrier hotel). The media and the mayor were cool with all of this because they had access and they got to meet the Pope. Was absurd. NYC faired better of course but they are more grown up with this and only in a small hick town like Philly could we have this type of pussy response to a Papal visit.The bottom line is if someone is such a big risk that you have to close the city then they shouldn’t be coming to the city in the first place the way I look at it.

        2. Lawrence Brass

          Very Trumpian I must say.

    2. Lawrence Brass

      Good reputation is an asset for both investors and founders.

  22. Wil Schroter

    @Fred – I’ve been an orphaned founder so I know this dilemma well. I was hoping you could provide a proactive plan for what to *do* about it, given that as a VC you’d have some nice “other side of the table” advice about what efforts might be fruitless or what hot buttons a partner may have. Obviously you’ll have to suck it it up and rebuild your syndicate. How do you message that so you don’t look like an asshat to the next potential investor? What’s the proper way to cut bait with your existing partners (or convince them to participate)?

  23. creative group

    Dr. Eric ThomasYou owe you! (Given in New Zealand)Get motivated! Get up and do it. Winners Win! No excuses!https://youtu.be/7Oxz060iedY

    1. Simone

      Europe is such a boring place 🙂

      1. Lawrence Brass

        It is New Zealand and I guess what you are missing.. you are missing the cheering crowd, are you?

        1. Simone

          I know it is NZ and googled the guy is from US. This is why I said that by comparison Europe is such a boring place. If someone spoke like that in a public place, people would probably call both police and some doctors :). I miss passion, people are terrified by passion in UK

          1. Lawrence Brass

            I misunderstood you sorry. However you have British humour, that you and only you can understand and the privilege of taking a train and go to look for passion in places on the other side of the channel.

          2. Simone

            I rushed the comment so it wasn’t clear, sorry, as I was amused by the video. I am not a native (a native would never critique his island), so nope, I don’t get British humour 🙂 and I think about the train all the time except for the time when I think about the plane

          3. Lawrence Brass

            I actually enjoy British humour which I somewhat understood trying to understand my father. I have a very good friend in Scotland that visits regularly and we always end up drinking wine and watching antique videos of UK TV shows.

          4. Simone

            I hope it is always in this order – first wine, and then the tv shows

          5. Lawrence Brass

            I can tell that is the order, videos or even music are just an excuse.You should take the train someday.

          6. Simone

            I should, I will. Thank you

          7. RichardF

            That’s just stereotypical horseshit

          8. Simone

            Sure. Read my next comment below, you just made me smile. You should smile too

    2. Lawrence Brass


    3. Simone

      @jasonpwright:disqus this is what LE and JLM would put you through if that meet up idea you had would materialise 🙂 I had this idea of a drill when I read your comment yesterday and now seeing this video, I had to say it

  24. ThatOtherOtherGuy

    I find it highly unlikely that any VC-funded company that is on a successful path to a liquidity event would ever be orphaned.Being orphaned by your VC doesn’t mean your company is dead. It just means that you’ve probably raised your last dollar of VC money. Conserve runway and move to profitability as quickly as possible.You’re going to have to build your company the old fashioned way: Hard work and a profitable product.

  25. lgomes

    That’s indeed a tough situation. I wonder if usually it’s clear that you’ve been orphaned by a VC or it takes time to realize you’re not getting the proper attention. What signs draw the line between “I’m hand-off” and “I’m not backing you anymore” VC behavior?

  26. Donna Brewington White

    Thanks, Fred. These words are priceless. Your championing of the entrepreneur has been a constant theme. Not just in words. As long as you keep this bar open, I’ll keep coming.For some reason the song has been going through my mind this morning “This joint is jumping…” I thought of AVC.

  27. george

    Viewpoint: generally, if you’re doing a really good job with performance and articulation, you shouldn’t be displaced for long, this often boils down to the relative value you create in relation to the level of attention you receive. If your current board and/or investor group is absent, then you simply need to work harder at gaining access to some essentials – wisdom, inspiration and valuable resources.You build success by overcoming many shortcomings – be passionate, relentless and plan for workarounds.

  28. Lawrence Brass

    Today I will leave the bar worried, that line resounding in my head..”But entrepreneurs are even more guilty of seeing the light at the end of the tunnel when it is actually a train coming”Last time I checked it looked like dawn and it gave me quite a lot of new spirits and hope.The tunnel ended up being a lot longer and darker than we thought, so when the light didn’t show up at the moment expected we were dubious and lost. Was it relativity? Where we going too fast?.. or worse, are we going too slow? Despair, endless nights, machine code goddesses, what went wrong? And suddenly, in the midst of the dark, a faint light appeared far away and refreshing visions of open lands and fresh air invaded our minds. The end of the tunnel at last..But, can it be a train? Can it be another train furiously headed in our direction in our same track? No, it can’t be.As almost every night I will go inside the tunnel. This time, for a change, I will focus on the shining light ahead.If I never show up again, it was a train!

    1. Donna Brewington White

      That line struck me too. But really, light at the end of the tunnel or train, we’ve got to keep moving toward it anyway, right? What’s the alternative?

    2. Simone

      I also quoted the light versus train metaphor, it is powerful because it is so easy to visualise and also Woody Allen-funny

  29. iggyfanlo

    Fred. I know you didn’t do this for the props, but kudos to you. Nicely played. Karma is real

  30. Rob K

    Fred- I think it really comes down to whether firms (and partners) are playing a short game or a long game. If you’re playing a long game, you know that a brilliant entrepreneur can have a crappy outcome. A VC may want to work with that entrepreneur again. Or the firm may want the entrepreneur’s referral to an entrepreneur or executive they know. VC is a service business and word gets out fast these days

  31. Hue Rhodes

    When picking investors, the whole reason we are at the table is because of some future promise of success. As an entrepreneur, an investment feels like a personal endorsement. But it’s not. It’s an endorsement of us/our company at some future state, which is not now. It’s great to hear you (Fred) urging your peers to not give in to the instinct to fade an under-performer. But the onus is also on us to take both the highs and the lows a little less personally. If our company is in a rough spot, we may really need that investor attention. But obsessing about getting it back isn’t the answer. If there is an answer, it will likely come from working the fundamental value proposition that generated that initial affection. And maybe (maybe) taking the isolation as a kind of opportunity to retool and get clarity.

  32. Andrew Kennedy

    “I have sat with an entrepreneur and explained that life is not fair and it is what you do after you realize it that really matters.” — Great line — My father who is a Vietnam vet (and knows damn well that life isn’t fair) taught me at an absurdly young age that “life is not fair” — Some years ago he told me the moment he knew that he had done his job preparing me / raising me –> we were at a Catholic service (was a Sunday morning ‘family mass’ – I was +/- 9 yo) when the priest asked a question to the audience (and in family mass structure) would go up to children and have them speak into the microphone with their response. I can’t remember the question, but my response was “Who ever said life is fair” –> the audience was taken aback and my father was beaming with pride (so he says/remembers). Better to learn that lesson early although not sure there is a benefit to learning it that young. Just some thoughts. Thanks for the post.

  33. Dan Cornish

    I was just thinking about this exact same issue with customer churn. Same thing. In the enterprise software world if your advocate in your customer company leaves the company, the chances of customer churn are high if the application has not been fully implemented into the company. And even then if your application is only important to a few people, if you advocate leaves you become an orphan. The lesson here is to always be engaged with your audience, be it VCs or customers. When either one doesn’t care about your company anymore, it is a new sale all over again.

  34. Dennis


  35. Donna Brewington White

    I hope I don’t have to eat my wordsResisted the pun that came to mind reading this. Do you find yourself using more food and eating metaphors these days?I’d put money on your not having to eat those words. So glad and excited for you. Waiting for gluten free. 😉