The CEO Review
As is often the case in life, open communication is the key for maintaining a constructive relationship. This also applies with the VC and the management of its portfolio companies. A good VC should provide regular guidance, as their experience is an important attribute that they bring to the table. Without open communication between the VC and start-up, the synergistic opportunities between the two parties cannot be fully realized.
This blog article talks about how one VC has taken a formalized approach by instituting annual CEO reviews for his portfolio companies. Overall, I see this as a valuable tool, as it gives the VC an opportunity to constructively discuss concerns that might exist. The challenge is for both parties to approach the review with an open mind, and use it as an opportunity to re-align expectations. Otherwise, the review can add fuel towards souring the relationship, and that is in neither party’s interest.