(Editor’s note: Brad Feld is an early stage investor and co-founder of Foundry Group. This post originally appeared on his blog.)
VCs say a lot of stupid things. I’m guilty of it plenty and whenever someone calls me on it I try to acknowledge and change. One that I try really hard not to do is say “my company” when referring to companies I’ve invested in – I think it’s one of the most annoying things a VC can say.
I was talking to a VC the other day about a few companies he had invested in. By the third time he referred to one of the companies as “my company” (as in “My company is working on X”, “My company would like to talk to Company Z about thing Y”) I felt myself starting to react. I didn’t really have a relationship with this VC, but I knew that he had never run a company (investment banking post college, MBA, then VC). I realized I wanted to stop him at some point and say “dude – it’s not your company – you are merely an 18 percent shareholder in the business.”
I bit my tongue and had the conversation, but I’ve been thinking about this in the back of my mind ever since.
One of the great lines from TechStars is “It’s your company.” That’s the way David Cohen and I remind the TechStars’ founders that ultimately all the decisions are theirs – the mentors (and us) are providing data, feedback, thoughts, and insight – but not telling them what to do. Sure – a lot of our (and the mentors) language is directive (e.g. I just sent an email to a TechStars CEO that said “you should do thing W right now”) but ultimately the decision as to what to do is the CEO’s.
While I’ve got plenty of rights as an investor, I’m very aware that I’m “an investor.” If you are a CEO or an entrepreneur, I can’t imagine anything more annoying than hearing one of your investors refer to the business as “his company.” Now, if the investor owns more than 50 percent of the company, I guess this is a legitimate legal perspective, but it’s still an incredibly demotivating position to take.
So – to all my friends out there in VC-land – let’s try to change the language. Some of the VCs I respect the most – like Fred Wilson – diligently refer to investments they make as “portfolio companies” (as in “our portfolio company X”). I often refer to them as “our investment” or “our portfolio company”.
Regardless of the approach you take, think about the language you use, especially the impact on the people who are working their asses off every day to make “their company” successful.