In Defense of Let Me Know How I Can Be Helpful
and how to respond to that question
|VC Starter Kit||Aug 4, 2019|| 20|
“Let me know how I can be helpful” is the very definition of a VC meme. It’s almost hard to not say if you work in venture, and I think that’s a good thing. If you feel like you need to unsubscribe now, I understand; the link is at the bottom of the email.
In the tweet below, Tracy Chou presents the founder experience when they’re given a “Let me know how I can be helpful” (idk, doesn’t seem all that helpful) and Leo Polovets is quoted with the typical VC perspective (I am genuinely interested in being helpful)
Leo Polovets@lpolovets"Let me know how I can help?" is overused, but it's often genuine and also literal. I say it frequently and mean it. But the number of people who reply with areas where they want help is maybe 3%. And then everyone complains that the offers to help are disingenuous :-) https://t.co/8XnmoM0R5p
They are both right. Sometimes the remark is insincere, but often it’s not.
The best way I can describe “Let me know how I can be helpful” is that it’s another example of freemium VC (see: Sarah Tavel's 2009 post on VCs producing content). It’s an offer of (a measured amount of) social capital in lieu of financial capital. Exactly how much social capital is being put on the table varies. Some of the issues around insincerity likely are due to a miscommunication of the extent someone is willing to be helpful.
What doesn’t work
Generally you want to make asks that align with the amount of social capital you think you’ve been offered. Here are some responses to “Let me know how I can be helpful” that will result in you being disappointed.
“give me money?”
By asking the “Let me know how I can be helpful” question and not offering $$$, VCs have effectively given you a soft rejection on immediately funding your company. VCs don’t like saying No, but they are forced to turn down most companies because their fund economics don’t support making more than a few investments per year. However, what they can offer for free is limited forms of social capital.
“can you introduce me to [big-shot VC]?”
What stings here is that they probably can intro you, but they won’t. If they aren’t investing, they likely aren’t bullish enough to extend enough of their own social capital for such a big ask, since the success of their portfolio companies depends on them having a good reputation with their upstream investors.
What might work
This is all context specific and advice is generally worth what you pay for it. Since this newsletter is free, treat it accordingly.
Generally you want it to be a quick ask that is answerable in the context of one (superhuman) email response with minimum context switching.
“Who else should I be talking to? You don’t need to intro me, I just want to get a sense if I’m missing anyone on my list”
“In your opinion, who are the best investors in this space?”
“If you were me, what would you do?”
“If you meet anyone else who is working on this problem, could you send them my way?”
“What are the things that would need to change for you to be excited to invest in this company?” (combined with a follow up email after you make those )
“What are the blog posts/twitter feeds/books I should be reading to help me?”
“Do you know anyone who does security at [X] company? I’d love to chat with them to get their feedback”
“Could you do a quick check with one of your portfolio companies to see if what I’m building would be useful? No worries if the response is negative, I’d just like the feedback”
“No, how can I be helpful to you?” — this one is a joke, but can work in a pinch. “If I meet companies that are interesting in this space, would you like me to send them your way?”
“Are you on Affinity? Do you use their alliance product at all?” If so: make an Affinity alliance request so you can get visibility into their network for intros — this works only if you’ve already had the partner commit to invest.
Of course, it’s entirely possible that the person you’re talking to flakes out (like in Tracy’s example above), but that’s a signal that you probably don’t want to work with them anyway.
Root causes: Positive Sum Games
The very nature of the technology products and businesses that Silicon Valley create allow for everyone involved to play positive sum games. It is rarely the case that two individuals are competing for the same fixed pool of resources or are relying purely on arbitrage. Instead there’s a common target, a technological innovation or entrenched “old-school” business where the spoils of succeeding are large enough to be shared among multiple players.
Some of it can be traced all the way back to the origins of Silicon Valley, Fairchild Semiconductor.
“We would often be in the lab working and get a call from one of our competitors across town- they would have some kind of problem, and they would ask for help. We would drop what we were doing, load up our equipment in our cars, and drive to their lab and lend a hand. We would work all night if we had to, and fix the problem. We would figure it out and then everybody would head to The Wagon Wheel to get breakfast together. The next day we were all back at work at our respective companies. That was the way it worked back then, we were all in it together.” — Jon Schroeder (a research engineer at Fairchild, source)
On the cynical take
You might say that some of the cases of people being helpful are investors just hedging their bets to curry favor with founders who might later end up doing well. I think this actually a positive side effect of the design of Silicon Valley. When you have no idea who might end up being the next successful founder or your next boss, you’re encouraged to operate in good faith. When you know that there’s a strong backchannel network to report bad actors, you’re disincentivized from playing unfairly and taking advantage of someone.
Market conditions are certainly a driving factor behind the rise of founder friendly venture firms, but the whisper networks among founders certainly did as well. A firm that uses the playbook of a firm in the 1980s will not get into any good deals. I know of many founders who have a written list of VCs they’d avoid raising money from.
The very fact that people have to be helpful, makes Silicon Valley a better place.
Paying it Forward
If you grown up in Silicon Valley, you might take the “pay it forward” culture for granted. I’ve noticed that some of the most successful people in technology actually did not actually grow up in the Bay Area but when they did move here, they took full advantage of the culture to help build them to where they are. As a result, they feel a connection to others who are now outsiders and trying to make their own way in Silicon Valley. One of the reasons people angel invest, is for this exact reason. they don’t have a strong expectation of return, but they want to be able to support entrepreneurs and derive enough satisfaction from this to make seemingly irresponsible financial decisions. A similar practice happens when emerging fund managers raise their first fund, many established VCs cut a (small) personal check to support them.
The fact that every player in Silicon Valley feels the need to be helpful (in the form of social or financial capital), is one of the reasons that Silicon Valley is more welcoming to outsiders than other industries (banking and politics are two notable comparisons). That being said, the people that are often the recipients of said social/financial capital often have a shocking amount of similarity to the ones offering it (whether that be educational background, gender, or hobbies [anyone up for some golf later?])
The optimistic note there is that Silicon Valley history has examples of how marginalized groups have responded to their systemic exclusion, with the formation of groups specialized design to build their own network. This is part of the reason groups like All Raise are important pieces of levelling up Silicon Valley.
In theory, VCs are not incentivized to discriminate, because if they do, they are leaving dollars on the table for someone else to claim. I think that we’ll see funds like XFactor Ventures do very well by taking a bet on the other side of that theory.
How can you be helpful:
While I have you, here’s how you can be helpful 😉
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