VC vs. PE: Navigating Differences in Fund Theses and Goals
Understanding the relationship between investors and startups is crucial to the success of any company. Brian, a former private equity investor, has a unique perspective on the subject, having worked on both sides of the coin. In a recent conversation, he shared his thoughts on how his background has helped him navigate the investor landscape as part of a venture-backed startup.
As Brian explained, his experience in real estate private equity has given him an understanding of the pressures that investors face. He recognizes that most venture capital is not the capital of individual investors, but rather comes from institutional investors who have put their money into funds with specific theses and return expectations. This has given him a good understanding of the external pressures that investors face, including the importance of valuable time and mitigating risk.
Using this understanding, Brian is able to help investors understand the value and timing of his company, and the respective risks involved. By doing so, he is able to mitigate their concerns and empower them to help his company succeed. This creates a more symbiotic relationship between the investors and the company, where both sides are incentivized to add value and mitigate risk.
Overall, Brian's experience in private equity has given him a valuable perspective on the investor-startup relationship. By understanding the pressures that investors face and how they make investment decisions, he is able to work more effectively with investors to build a successful company. This is a valuable lesson for any startup founder or investor to keep in mind as they navigate the world of venture capital.