Venture capital value add: 3 ways to earn founder trust
Brian Nichols is the co-founder of Angel Squad, an angel investing community where aspiring and active angels learn from Hustle Fund’s approach, review curated deal flow, and connect with peers.
A founder can hear “we add value” from several investors considering their startup. You need to explain what help you can provide and why it fits the company.
Venture capital (VC) value-add is the knowledge, networks, and practical support an investor provides beyond capital. It includes help after investing, but it also gives founders something concrete to assess when choosing investors.
Allocation is the amount you're invited to invest in a fundraising round. For angels, the conversation about fit starts before the check.
VCs are media companies now
Our co-founder and general partner Elizabeth Yin wrote, “At the end of the day, money is a commodity.” Sharing relevant experience gives a founder something beyond your check to assess.
A founder trying to hire their first salesperson comes across your guide to that exact decision. You explain the role, the mistakes you've seen, and the tradeoffs. They now have a useful piece of advice and a sense of how you think.
Content lets you share knowledge at scale. At Hustle Fund, our newsletters share lessons with founders and investors. Small Bets, our free investor newsletter, is one way we make our investing approach visible before we've met a reader.
Other firms use the same channel. Andreessen Horowitz publishes podcasts about technology and company building. First Round Capital's First Round Review publishes advice from founders and operators on hiring, product, growth, and management.
For an individual angel, start with a problem you know firsthand. Use your content to:
- Show your expertise. Explain a decision you've handled, including what went wrong and what you'd do differently.
- Help a founder make progress. Share a usable interview guide, customer-research approach, or lesson from building a team.
- Make your perspective recognizable. Stay close to the problems and sectors where your experience is relevant.
Your background can combine several capabilities. In our conversation with Landon Campbell, he connected his podcasting and media experience to helping early-stage founders craft brand stories and media practices. That combination gave him a specific contribution to explain.
Media experience may help a team struggling to explain its product to customers. A team with an urgent engineering hire may need a different investor's help. Describe the work you can do for that founder, rather than offering a list of interests.
Useful content can create familiarity and give a founder a reason to start a conversation. It doesn't guarantee allocation. The founder still has to decide whether your experience, check, and working style fit the round.
VCs are community builders now
Events give founders access to people they might otherwise struggle to meet. A small gathering can connect a founder with an experienced operator, a peer facing the same problem, or an investor who understands their market.
The practical value depends on who is in the room and whether the connections fit what attendees need.
Y Combinator's Startup School combines startup education with co-founder matching. A historical example is Sequoia's first Base Camp in 2016, where it introduced GitHub co-founder Chris Wanstrath to Microsoft's Satya Nadella. Both illustrate ways a venture firm can create access alongside sharing knowledge.
An angel can do this on a smaller scale. If you know founders hiring their first sales leader, invite an operator who has made that hire to a focused discussion. If you know potential customers in a founder's market, arrange a relevant introduction with both sides' permission.
Make the purpose clear before people give you their time. A useful gathering has a defined topic and a reason for each person to attend. Afterward, follow through on the introduction or resource you offered.
Community can help founders understand what working with you would feel like. Keep that access useful even when an investment doesn't happen. Attendance is no promise of funding, and hosting an event doesn't entitle you to invest.
VCs are influencers now
An investor's audience can help a startup reach customers, candidates, and other investors. The relevant audience matters more than its size. A product for hospital operations needs different attention from a consumer app.
At Hustle Fund, we use LinkedIn and X to share ideas and company news. Those channels make it easier to distribute useful information beyond the people we meet directly.
Lightspeed highlights founders and lists portfolio company jobs. Those are two useful things an investor can draw attention to.
You can put your own reach to work in a few concrete ways:
- Share a company with potential customers. Explain who the product serves and the problem it solves, with the founder's approval.
- Help the founder's content reach the right people. Add relevant context when sharing a product explanation or customer story.
- Amplify an open role. Describe the work and the candidate profile so people can recognize a fit.
- Introduce relevant investors. Use relationships with investors whose stage and sector interests match the company.
Live discussions and ask-me-anything sessions can also show founders how you think. Keep them tied to questions you have the experience to answer.
Pay attention to what happens after a post or introduction. An interested customer, a suitable candidate, or an accepted investor meeting gives you a clearer account of your help than a view count. None guarantees a sale, hire, or investment.
Going beyond the check
At Hustle Fund, we think about our contribution in three parts:
- Capital. Money to support the company's work.
- Knowledge. Content, insights, and experience relevant to its decisions.
- Networks. Connections to customers, operators, peers, and investors.
Our co-founder and general partner Shiyan Koh asks, “What specific superpowers do they bring? How do they prioritize their time to deliver meaningful support to their portfolio companies?” She uses those questions when evaluating funds. Angels can apply them to the help they offer, too.
Choose the capabilities you can back up with experience, then connect them to a current founder need. For example, an investor with media experience might offer to spend an hour clarifying the company's customer story and suggest relevant podcast hosts. That is a specific commitment the founder can assess.
Be clear about your available time and the limits of your expertise. Keep the contribution relevant as the company grows, and deliver the help you've offered. Our guide to supporting founders after investing covers that ongoing work.
Value-add gives founders a clearer basis for choosing you.
For peer learning and deal reviews that help you connect your operating experience to founder needs, apply to Angel Squad.
Value-add cannot guarantee allocation or protect an investment from failure. Startup investing is risky. Most of your investments may fail, and you can lose your entire investment.
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