Follow me @samirkaji for my random, sometimes relevant thoughts on the world of venture and start-ups. It’s an immutable fact that delivering strong returns are necessary in building an enduring venture franchise. In my last post, I discussed the three important components of investing (sourcing, picking, and winning) and how managers should assess their differentiation around those items. Most new venture managers consider these elements of investment strategy before launching, but other key basics of running a venture franchise don’t often receive enough consideration at the front-end. Just like any company, a venture firm has multiple constituents to manage: shareholders (LP’s), clients (portfolio companies), and partners (co-investors, service providers, etc.). When talking with aspiring venture managers, I often hear “I want to raise a fund” rather than “I want to build a great venture franchise”. Although perhaps I’m being overly nuanced, the latter statement creates a more appropriate mental framework when contemplating getting into venture. While fundraising and investing are key components of a new fund, addressing the firm’s core mission, values and infrastructure are crucial to building a durable franchise that will grow beyond the first check. Mission Nearly every successful company has a clear mission statements that describes succinctly the reason for “why do I exist”. A venture firm’s mission statement should be clear to all constituents of the firm (firm employees, LP’s, and founders) to ensure focus, discipline, and unity of organizational direction. First Round Capital, YC, and Andreesen Horowitz all have done great jobs about identifying their respective missions. A mission statement shouldn’t be complex, but should be authentic and be able to serve as the directional compass for the firm. Team Construction While good team construction doesn’t appear like something that needs to be reinforced, history suggests otherwise given the poor succession planning, lack of diversity, and partnership conflicts that litter the industry. One recurring mistake I see managers make is building a team as byproduct of what they believe will accelerate fundraising. From experience, patchwork or “latch on” partnerships seldom work, and likely will lead to conflict (or worse) at some point — I can’t begin to count how many conversations I’ve had with GP’s who are dealing with unhealthy partnership dynamics. Additionally, once a partnership has been identified, all key issues and potential scenarios must be discussed at the outset, no matter how uncomfortable the conversation. Not having these frank conversations upfront will almost assuredly create really uncomfortable dialogues later. Core Values While firms often speak about core values, very few truly build an organizational ethos around them. When speaking about core values with venture managers, we usually find that none have clearly been set, or if they have, little time has been spent...

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