VC = “Very Candid”

I gave my daughter some tough feedback on her gymnastics competition last night…there were tears.

Then I told her I wouldn’t bother giving her feedback if I didn’t think she had tons of potential. There were more tears…and then she gave me a hug.

This is a pattern I go through with portfolio founders more often than you’d think. Less tears, but it feels just as horrible for both of us in the moment, and often the easy thing is not to raise it and to keep things ‘warm and fuzzy’. There is no disaster or impasse, but you’ve seen a blind spot/ growing distraction/ underperformance to potential.

Giving painful, unsolicited advice is an uncomfortable position for most people, but for VCs, it is the job description.

Founders need cheerleaders. They also need a coach who will call them on their bad habits and remind them of the game plan when the events on the field have them flustered.

Multi-stage VCs have to walk a careful line. They’re trying to support generational outcomes, but they’re also trying to stay on the founder’s good side and get the best terms possible in future rounds. More cheerleader looking good than coach debriefing in the locker room.

This is where true Seed funds have a structural advantage:

We can risk giving founders tough love when they need to hear it.

Because FC doesn’t lead beyond Seed, we’re not selling to our founders. After the term sheet is signed, our only incentive is to help them achieve the best possible outcome for themselves, AKA valuation balanced against dilution. What’s best for them is best for us.

But what’s best for founders isn’t always what’s easy to hear. One founder iced me out for a year after I told him he was raising his next round ‘over his skis’ and over-optimizing on price while under-optimizing for the best long-term partner. Now, after those dynamics played out, we have a great relationship.

We never want to be the villain and always hope founders will have a clear head when receiving critical feedback. But startups are immensely personal, and asking a CEO who’s working 80-hour weeks to keep emotional distance is easier said than done. Ultimately, we can risk losing ‘brownie points’ for the sake of building a stronger business together and saying the things that no one at the Board meeting wants to say.

To be clear, I don’t think VC’s need to be brash or overly critical. But an investor who never makes you mad won’t help you make money.

Honest feedback is the most hurtful because it has the ring of truth.

My goal for this year is to give more tough love in the moment and not months later. Whenever I don’t, I regret it. LOVE is the key part of the equation: if there isn’t trust, then you’re just demotivating. But when there’s a solid foundation, tough love builds more durable trust.

Founders – no one knows your business better than you, but sometimes you can see patterns at 30,000 feet that you miss in the weeds.

If you value advice when it’s affirming, value it 2x when it isn’t.