Sunday, May 28, 2017

Practical Advice: VC Annual Meetings

Depending on the annual meeting, I both love them and dread them.  First, let me just say that every venture capital firm should have an annual meeting.  No matter what the size of the fund(s) or size of the team. If you are a venture capital firm, once a year you should dust of the PowerPoint slides and small talk and fake an interest in having all your LPs in a room.  When I review limited partnership agreements with outside counsel, I always ask if the manager/fund has an annual meeting.  If not, that is something I will absolutely comment on.  A few obviously bias tips/ideas for having an annual meeting that hopefully are somewhat practical.  

1. Have an annual meeting.  If Greylock can have two a year, you can have one.  As a last resort, do it it every eighteen months.

2.  Don't have it in September, October, April or May.  I don't know who went first and everyone followed, but there is definitely a "season" to annual meetings.  Be the firm that has one the last week of July or in January.  Find a day with as few conflicts withing your LP base as possible and keep it so that it becomes a day of the year that all of your LPs look forward to every year.  

3.  Make it an experience. Don't do it at the Four Seasons in San Francisco or East Palo Alto.  Have it somewhere where your LPs can't pop in and out and are neurotically checking their email.  Even if you're in the Bay Area, think outside the box and have it at Cavallo Point, Sonoma/Napa or Half Moon Bay (doesn't have to be the Ritz).  The Pearl in the Dogpatch is just hard enough to get to that it's becoming a destination even within SF.  Don't be afraid to have it offsite in another city especially if you have it "off season".  I wouldn't recommend renting out all of AT&T Park (that didn't end well).

4.  Don't have a fireside chat unless it's actually beside a fire.  And yes, I've been to an annual meeting with s'mores and a bonfire.  

5.  Go into detail on the portfolio and teach us things that we don't know about the portfolio and the funds. Even if you don't give out hard copies of materials because of confidentiality/trade secret reasons, go off script. Connect with your audience. Don't assume we know why AI/ML is a big thing. Teach us. Teaching is the best sign of your mastery.  You also don't need to give us a bunch of industry data on VC.  Thanks to Pitchbook, we have that at our finger tips.

6.  Know your audience. Pick speakers/topics/companies that we want to hear about.  If your're in a Unicorn that is in the press a lot (e.g. Uber, Lyft, Instacart, Stripe, Airbnb, etc.) please try and tell us everything you can about the company.  This is the fuel that makes us run, the thrill of being a part of that something special you have invested in.  Give us a taste. If you place us in position of trust with information that is hard to come by, we will covet it and treat it as sacred and appreciate so much that trust that you have given us.  

7.  Avoid a ton of CEOs and panels. Teach us, but don't lecture us. Make sure you make it "LP digestable". If you're a healthcare venture capital fund you especially have to cut the lingo down and tell us what you're trying to cure and how.  Explain it as if you assume we know nothing, because we won't raise our hand in front of a room of our peers and say "Can you dumb it down to my level". We're sheep and so be our shepherd.  

8.  Invite everyone at your firm whether junior or senior. Treat it like a grade school open house where we get to see everyone. Be sure to thank the people that made the event possible.  

9.  Don't all sit in the back of the conference room with your partners at the "reserved tables" and check your email and "phone it in" because this is something you feel like you have to do.  This is an opportunity for your LPs to really connect with your cause, passion, mission. Make it so enjoyable that you too are engaged. 

10.  Don't have a plated luncheon with name tags. We notice when we get seated with the third cousins-once-removed. 

11.  Have fun. You're venture capitalists and none of you said when you were in kindergarten that you wanted to grow up and be VCs.  It's the best job in the world and a great gift to get to be part of the small industry. Have an annual meeting that shows you take your jobs/fiduciary duties seriously but not yourselves too seriously. 

12.  Tell us revenue and valuations. Go into detail. If nothing else, explain to us what each company does and why it's important/disruptive/awesome. Have us try cool stuff and try and absorb some of the magic of what you're doing.  

13.  Have everyone at the Firm present and don't have your CFO give the performance section of the PowerPoint slides. It will be dry, boring and overly scripted. Showcase the entire team and complement everyone both senior and junior for their efforts for making the Firm and its fund(s) a success.  

14.  Have one audience so don't combine your annual meeting with your CEO summit where you're having to court/entertain two audiences. You naturally should be courting and entertaining your CEOs first so it's noticeable that your LPs are second.  Make one day per calendar year all about your LPs. Also, don't have an LPAC meeting right afterwards where it's noticeable that you're kicking out the masses to go tell the chosen ones more than you told us.  Have the LPAC meeting beforehand or on another day.  

15. Give away some swag with your logo on it.  Not moleskin journals. Vests, mugs, pens, umbrellas, t-shirts, hoodies, golf balls, socks, windbreakers, etc.  We're proud to be your LP and so help us help you fly your flag.  Swag can be a badge of honor. Going to an annual meeting and not getting swag is like opening a birthday card from your aunt and not getting a $10 bill.  It's a fund expense after all and we play dumb to this once a year treat on our collective dime.  

16.  Make sure part of your meeting has natural light as we will naturally seek it out like plants after too long in the dark conference room of the hotel of your choosing.  

17.  Rehearse what you're presenting and when you present, don't read from a script and have your back to the audience because you're looking at your own slides/charts on the projector.  Play music before/after and during the breaks.    

18.  Give us a glimpse of what it's like to work at your firm and how you prosecute investments and win. This is a great opportunity for us to learn more about your firm and get closer to the narrative and operations of your firm outside of when you raise money.  

19.  Thank your spouses and invite them to the annual meeting. Invite your parents and other loved ones.  An annual meeting is basically VC show and tell.  You should be incredibly proud of what you do.  

20.  Have FUN and celebrate your successes.  

5 comments:

  1. Trey - We know you have probably been to hundreds of annual meetings, so we appreciate this thorough list of advice on running an annual LP meeting. Great sense of humor, and we will try to take all this into account in our annual meeting this year, which unfortunately is scheduled for October. As a midwest fund, we cannot yet have our annual meeting in Napa, but perhaps once we have a Decacorn or Hectocorn under our belt (a unicorn would not fully justify it) :)

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  2. You can always make it a draw in your own town/community and showcase some unique insight you have into the local economy. VCs are supposed to know all the places the cool people hang out where us LPs only dream about (like Guy's penthouse/hot tub). I once went on a duck tour in Boston during an annual meeting to see Boston-area startups. You don't have to be in the Valley to have a Valley mindset. Whatever you do, make it memorable because people will keep coming back for more.

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  3. Quite a nice share on VC Annual Meetings. It was really good to read all this. Anyways, I too need to find the meeting space San Francisco for our promotional event. We have never organized a grand promotional event so we are not finding any spacious venues. Could you recommend a good one?

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    1. I've never organized a grand promotional event either, but I have organized fund and engaging events (or at least IMHO). The Pearl in the Dogpatch is nice but it's a larger venue. Perhaps try and find a nice quiet place at a park or a small coffee shop where you can have a reserved space. Or rent a private room in a fun restaurant. Dim sum and Powerpoint in Chinatown or Japantown never sounded so good.

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