In all other facets of business or life, when you make a long term commitment to someone else, there are rules governing the commitment. Marriage vows, service level agreements, early termination provisions, employee handbooks, codes of conduct, CC&Rs, etc. These governance documents all go into great detail on how the relationship should work and help to set expectations.
When you enter into a relationship with a VC though, very little is actually codified. There are financing docs but much of what is spelled out in those agreements is purely procedural and does little to define the expectations of the parties over the life of the relationship (10+ years). In an effort to address this failing I am working on something akin to a Venture Capital service level agreement. What follows is a rough draft of the SLA. Please let me know if I've missed something or included something that should go without saying. We are open to any comments, ridicule or praise. Please let me know what you think in the comments or at my twitter handle @runvc
The goals here are (1) to set expectations and (2) to craft a VC firm that is responsive to the needs and desires of founders.
Sazze Partners Pledge
- Respect – We respect your time.
- We come to meetings prepared
- We can close an investment in no more than 3 meetings and diligence can be done in less than 2 weeks
- Transparency – We are open and honest about our decisions
- If we pass on an investment after engaging with you, we will provide you with a written explanation for our decision.
- Mutual Interest – We believe relationships should be based on mutual interest.
- We won’t ask you for exclusivity or confidentiality during our pre-investment discussions. If we partner with you we want it to be because we were the best match, period.
- Community – We want to join your community and we want you to join ours.
- If we invest, we want to be involved at the board level and if you don’t yet have a board, we want to be there when you do. We will help prepare you for series A board meetings and beyond.
- We invite all of our companies to participate in our community.
- Founder Friendly- We believe that the best startups are run by founders who care passionately about their companies. To that end, we aim to support founders as much as possible.
- We are willing to take a portion of our equity on par with the equity held by the founders as a means of aligning interest.
- We are willing to do the hard work of pricing and leading rounds.
- We believe in supporting founders through thick and thin and in helping them grow into their leadership roles.