Edited excerpt (with some wording changes) from VC Value add: Why it probably doesn’t matter, but I try anyway by Charlie O’Donnell:
An experienced founder who had been through lots of rounds as both an entrepreneur and an angel investor told me the following:
“There are maybe two or three VCs on the face of the earth that add any value to the eventual outcome of a company. So there are really just a few criteria that matter: They should do no harm. They should be able to close the round quickly and without too much distraction. You should like them enough to have them on your board. And they should hit your bogey in terms of price.”
So why not just leave it at that and be an open phone line? Why try to add value?
Because starting a company is the hardest thing you’ll ever do (maybe besides having a kid). The least I can do is make you feel like I’ve got your back and I’m there with you along the way.
If not feeling alone gives you any comfort, I’m doing my job.
(1) My experience with Seeking Alpha’s investors: “I’ve got your back and I’m there with you along the way” makes a huge difference. That’s because being a founder involves terror, mood swings, and generally feeling bad.
(2) For a more optimistic view of where else VCs can add value — see Where VCs and board members add the most value.
(3) Re. “They should do no harm” — see (i) Do most VCs add negative value?, and (ii) VC pitfalls to watch for: trying to fix companies.