Why star VCs matter (and what doesn’t)
Having a big name VC on a firm such as Marc Andreessen matters more to startup founders than being funded by a big name firm, according to a new study.
- Cromwell Schubarth
- Senior Technology Reporter- Silicon Valley Business Journal
Startup founders want big-name VCs like a Marc Andreessen or a Reid Hoffman on their side, not no-name firms.
And having women on the team at the firm matters more than funders think.
Those are two of the findings of a big brand study done for the National Venture Capital Association by Desantis Breindel and Rooney & Associates.
An overwhelming majority of founders in the study said VC brand means a lot to who they seek funding from.
But they disagree strongly in key areas about what is most important in that branding.
More than half of the venture-backed CEOs in the study (57 percent) said they care most about the reputation of a firm’s individual partners. Only 38 percent said they focus on the firm’s overall reputation and a mere 5 percent care about the reputation of the firm’s portfolio companies.
The gender gap may be a result of more women founders starting up companies than there are women making partner at VC firms.
One in four founders said the gender makeup of a VC firm mattered to them while only one in 10 VCs said they thought it mattered. But two-thirds of women founders said it matters to them.
Other findings of the brand study include:
— Proximity matters: About half of both founders and funders said that being located near their funders mattered to them, with about the same number saying that firms located in Silicon Valley, Boston and New York City are most attractive.
— Friendly but not too much: CEOs said they want a VC firm that is entrepreneur-friendly and collaborative but they are turned off if the firms have too much of a hands-on reputation.
— Peer networking: CEOs said the most important activity that VC firms can provide is a summit or meeting where they can learn from other founders.
Click here to read more about the National Venture Capital Association branding study.
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Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.
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