How do you establish credibility as a venture capitalist?

A founder-turned-investor comprehends the needs and pain points of entrepreneurs, forging a more empathetic and supportive partnership. This dual perspective bolsters strategic decision-making, accelerates due diligence, and establishes credibility within the startup ecosystem. Having walked the entrepreneurial path enhances a venture capitalist's capacity to foresee opportunities, navigate pitfalls, and significantly contribute to the success of portfolio companies. The firsthand experience of building and scaling a business offers a profound understanding of challenges, market dynamics, and operational intricacies. This background fosters a unique ability to identify promising startups, assess risks, and provide practical guidance.

Remember that many founders don’t know the lingo. Keep the converstation simple to avoid missunderstandings and help the founders to feel safe.

Brutal honesty in communications between venture capitalists and entrepreneurs is a cornerstone in building a unique profile in the industry. Transparent and candid conversations, though sometimes uncomfortable, are crucial for fostering trust and growth. By openly addressing challenges, risks, and potential pitfalls, both parties can make informed decisions and adapt strategies accordingly. In the dynamic landscape of startups, the key of brutal honesty paves the way for lasting success, partnerships and reputation.

Many Venture Capital firms fail to deliver value beyond capital but argue every given chance that they do - challenging this for founders by reference call portfolio companies does the trick - For VC this means they neeed to score with practical expertise and hands-on support instead of operating on 30'000ft based on KPIs and metrics. VC funds have started to add operational talent and experts to their partner team in order to demonstrate this and to put their money where their mouth is.

Remember as an investor you're also a partner, so be one. Be helpful to the founders. Support as best you. Only they succeed, do you succeed.

The chicken and egg dilemma pertains to the challenge of establishing credibility without a prior track record, especially in entrepreneurship. Having previously founded a company provides a pivotal advantage. A proven entrepreneurial history not only showcases the ability to navigate challenges, but also demonstrates competence in decision-making, team leadership, and strategic planning. Investors and stakeholders value this experience, as it minimizes uncertainty and risk. This past success acts as the "egg" that precedes the "chicken" of building trust and attracting resources for a new venture. Consequently, a pre-existing track record forms a solid foundation for future business endeavors.

Everyone is speaking about the RoI - Return of Investment - but what about the RoF - Return on Failure? Sharing failures offers an authentic glimpse into the dynamic and uncertain VC world. It demonstrates humility, resilience, and a commitment to learn and improve. By openly discussing missteps, you humanize yourself and establish relatability with founders. This transparency fosters trust and rapport, making entrepreneurs more likely to seek your support. Your willingness to learn from failures also showcases adaptability and a growth mindset, qualities highly valued in the VC realm.

Another point to consider can be Collaborating with other experienced VC's and sharing valuable insights can help sharpen the understanding of the industry. Furthermore, a VC could also adjust his domain focus over time based on market dynamics. Adaptability and Flexibility are key qualities in the rapidly changing world of venture capital.