20VC How Investors Can Build Relationships with Founders In Organic, NonTransactional Ways & How VCs Should Handle Founder Disputes with Saar Gur, General Partner @ CRV

In this episode of "20 minutes VC," host Harry Stebbings interviews Sar Gur, a General Partner at CRV, one of the nation's oldest and most successful venture capital firms. Sar shares insights from his journey in VC, highlighting the importance of supporting entrepreneurs, not just financially but by fostering their growth mindset and aiding in company building. He emphasizes the role of VCs in navigating founder disputes and the need for diversity in venture capital. Sar also discusses his approach to relationship building with founders, prioritizing authenticity and trust. The conversation delves into the challenges founders face, particularly in hiring and evolving as CEOs, and how VCs can add value beyond capital by encouraging founders to think differently and be resilient in the face of adversity.

• Saar Gur is a general partner at CRV (Charles River Ventures).
• CRV is one of the nation's oldest and most successful venture capital firms.
• Saar has made investments in companies like DoorDash, Dropbox, Patreon, and Ring.
• Forbes and Venture Capital Journal recognized Saar as a top venture capitalist.
• Saar was the founder of Brightroll, a video ad network acquired by Yahoo for $640 million.
• Thanks given to Kent Goldman at Upside for the introduction to Saar Gur.

"I'm thrilled to welcome an all star from the world of VC to the hot seat today. Saar Gur. Now Saar is a general partner at CRV, one of the nation's oldest and most successful VC firms." "Prior to VC, Saar was the founder of Brightroll, a leading video ad network that was acquired by Yahoo for a reported $640,000,000."

These quotes introduce Saar Gur as a prominent figure in the venture capital industry, highlighting his successful background as both an investor and entrepreneur.

• Foundersuite is a CRM for raising startup capital with a database of over 50,000 investors.
• Since March 2016, Foundersuite customers have raised over $130 million in seed and venture capital.
• Greenhouse Software provides tools for companies to hire great people and is recognized as a top workplace.
• Greenhouse works with innovative companies like Airbnb, Slack, Snap Inc., and Lyft.
• The podcast offers a 40% discount on Foundersuite using the promo code "20 minutes VC".

"Foundersuite makes the leading CRM for raising startup capital." "Recognized as the 2017 best place to work in the US by Glassdoor, Greenhouse currently works with over 1500 of the world's most innovative companies."

These quotes describe the services provided by Foundersuite and Greenhouse Software, emphasizing their importance in the startup and hiring ecosystems.

• Saar Gur has a consistent fascination and respect for entrepreneurs.
• He has been a cheerleader for entrepreneurs and has been genuinely happy for their successes.
• His enthusiasm for entrepreneurship led him to start his own companies and help startups.
• Despite his day job, Saar spent time helping entrepreneur friends with advice and introductions.
• Saar's judgment and networking improved over time, leading to more referrals.
• Between 2005-2007, he noticed a gap in the funding market and helped companies get financed.
• Saar made angel investments in teams he believed in, which became high profile in Silicon Valley.
• The resurgence of interest in the Internet by VCs put Saar on their radar.

"I've had a fascination and a respect for entrepreneurs... I've been genuinely happy for entrepreneur successes, whether I know those people or not." "No matter what my day job was... I found I was always spending time on weekends and on evenings and during work trying to help my entrepreneur friends."

These quotes from Saar Gur reflect his deep-rooted passion for entrepreneurship and his journey from helping friends to becoming a key player in venture capital.

• Harry Stebbings discussed his gradual interest in venture capital, highlighting three main factors.
• The prospect of financially empowering startups, particularly consumer Internet companies that were often overlooked by other VCs, was thrilling.
• The importance of a compatible partnership in venture capital was likened to the importance of compatibility in marriage.
• Harry recognized a shift in his career aspirations from wanting to be a founder to being content with supporting other founders.

"Now, it took me a few years, a couple of years to kind of come around to getting really excited to do venture." This quote explains the time it took for Harry to become enthusiastic about a career in venture capital.

"The idea of being able to give them lots of money at a time when many vcs were doubtful of consumer Internet companies was exciting to me." Harry was excited by the opportunity to invest in consumer Internet companies, which were not widely supported by other venture capitalists at the time.

"And for me, I did find a partnership. The folks here at CRV who I really liked and respected and thought they could also make me a better investor." The quote highlights the importance of finding a venture capital firm, in this case CRV, that aligned with his values and could help him grow as an investor.

"I think when I came around to that realization, I was ready to engage and join the folks at CRV." Harry's readiness to join CRV came after he accepted that he could find fulfillment in focusing on other people's companies rather than starting his own.

• Saar Gur discussed the significance of providing capital to startups, especially when other investors are not willing to do so.
• Continuous financial support can be critical for startups, but it requires careful consideration of when to keep investing and when to stop.
• Saar emphasized the importance of belief in the founding team, which can lead to continued investment despite external skepticism.
• He shared a personal story about investing additional funds in a struggling company based on his belief in the team, which ultimately led to the company's success.

"I think we add value, but 99% of the work is on the founders, but the biggest value that we add is the money." Saar acknowledges that while venture capitalists can add value, the majority of the effort and success lies with the founders, and the most significant contribution from VCs is financial.

"If we believe in the team, we often will fund the team, hoping that they make it to the other side." This quote emphasizes the venture capital approach of CRV, which focuses on the founding team's potential and progress rather than just the current financial state of the business.

"I think some of the biggest moments, most gratifying moments I’ve had have been when I can look back and I've been right." Saar reflects on the rewarding experience of having his belief in a founding team validated through their eventual success.

• Saar Gur explained the process of building authentic relationships with founders.
• Authenticity and a founder's passion for their work are key to forming a natural connection.
• Trust and regular communication are essential for maintaining relationships, much like in a marriage.
• Each founder has a unique communication style, and it's important for venture capitalists to adapt to these preferences.

"So authenticity to me speaks volumes. Like, if you're working on a problem and it's very authentic to who you are, and you're inspiring to me that you're working on this problem, and I see potential talent in your ability to solve that problem, I find it very energizing to want to build a relationship with those founders." Saar values authenticity in founders and is drawn to those who are genuinely passionate and talented in solving problems, which prompts him to build relationships with them.

"First we need to build some level of communication, not unlike my marriage. If I don't find regular communication, it's hard to have ongoing trust." Saar compares the importance of communication in building trust with founders to that in his marriage, highlighting its critical role in relationship-building.

"Some of my founders want to take a walk on Sunday evenings. Some of them want to talk on the phone several times a day. Others want to text and engage primarily over text." This quote illustrates the diverse communication preferences of different founders and the need for venture capitalists to be flexible in their approach to relationship-building.

• Harry Stebbings discusses his philosophy of approaching founders with love and belief in their success.
• He contrasts his supportive approach with other investors who react negatively during challenging times.
• Harry emphasizes the importance of supporting founders, providing guidance, and having faith in their abilities to overcome difficulties.
• He believes that when investors focus on believing in the team, "magic can happen."

"I honestly feel like I approach my founders from a point of love, wanting them to succeed, and a point of wanting to be fearless in believing in their success."

This quote encapsulates Harry's investment philosophy, which is grounded in a supportive and trusting relationship with the founders he invests in.

• Saar Gur stresses the significance of getting entrepreneurs to think differently.
• He mentions that it can involve sharing stories of how other companies solved problems or making introductions to people who can inspire new perspectives.
• Saar believes that thinking differently can unlock huge potential in founders and companies.

"But thinking about the world differently often has great impact and unlocks huge potential in founders and in companies."

Saar Gur explains that a fresh perspective can be a powerful catalyst for growth and innovation within a company and its leadership.

• Saar Gur talks about the evolving role of a CEO and the importance of a growth mindset.
• He observes that many young founders do not naturally apply a growth mindset to their role as CEO.
• Saar highlights that the best CEOs have a thirst for learning and understanding every aspect of company building and leadership.
• He suggests that founders should train and improve like athletes, recognizing that the CEO role is challenging and constantly evolving.

"And many young founders, I don't see them applying a growth mindset to sort of understanding what being a CEO means and how that role changes over time."

Saar Gur points out a common oversight among young founders, who may not fully appreciate the dynamic and demanding nature of the CEO role.

• Saar Gur explains that once a company finds product-market fit, the company itself becomes the product.
• He advises that venture capitalists often tell CEOs to spend most of their time on hiring.
• Saar emphasizes the importance of understanding company building and how it can help a product reach its full potential.

"So one of the things I love in being a venture capitalist is once a company finds product, some sort of product market fit, the company actually becomes the product in my mind."

Saar Gur shares his perspective on the evolution of a company post-product-market fit, highlighting the shift in focus from the product to the company's internal structure and processes.

• Saar Gur identifies the transition from a small team to building a capable team as a common challenge for founders.
• He notes the difficulty in balancing delegation with maintaining control over functions within the company.
• Saar emphasizes that hiring is a particularly difficult aspect of scaling a company, with a significant proportion of executive hires not working out.

"I think that many teams at the state, again, where I tend to get involved is when the team is very tiny."

This quote from Saar Gur acknowledges the challenges that arise when a startup begins to scale and the founder must adapt to a changing team dynamic.

• Saar Gur discusses the variable involvement of VCs in the internal affairs of companies, especially in handling founder disputes.
• He criticizes the common heuristic of removing a founder when disputes arise, advocating for a more nuanced approach.
• Saar shares an example where he chose to spend time with the founders to understand the situation better and find a solution that retained a valuable founder.

"So the fun part in what I find in most of venture capital is vcs can get as involved or as uninvolved as they want."

Saar Gur describes the flexibility VCs have in engaging with the internal challenges of the companies they invest in, highlighting that many choose not to get deeply involved.

• Conflict between founders can be a significant challenge in startups.
• Saar Gur emphasizes the importance of understanding and addressing the underlying issues in founder conflicts.
• He describes a personal experience where he intervened to resolve a conflict between founders, leading to a successful outcome.

"Look back two years later and say I felt that that was not the right decision, that this was fixable, and that both of them could be highly productive and contribute a ton to the company. And in that unique example, I was right. And fast forward two years later. They've got an amazing relationship and they're doing phenomenally well."

This quote illustrates the potential for positive outcomes when conflicts between founders are managed effectively. Saar Gur reflects on a situation where his decision to work through the conflict led to the founders having a strong relationship and contributing significantly to the company's success.

"It's different to go get. I'm trying to think in the one situation, I think it was like no less than 20 conversations, maybe even more, with a number of walks and dinners and lunches, to just really dig deep and try and figure out what was really going on and what was motivating both sides and assumptions people had."

Saar Gur describes the extensive effort required to resolve founder conflicts, including numerous conversations and meetings to understand each party's motivations and assumptions.

• The transition of roles within a startup can lead to challenges, especially as the company grows.
• Ego can be a major factor in the difficulties experienced by founders who are not in functional roles but still hold board positions.
• Saar Gur discusses the importance of coaching founders to adapt to new roles and ensure their continued engagement and success.

"As the company really gets product market fit and grows as an organization, you get a lot of challenges, ego challenges, and figuring out where to place people and skill sets and other things that make it really hard."

This quote highlights the complexities that arise as a startup matures, particularly relating to the distribution of roles and the management of egos among founders.

"Like, hey, if you want to stay engaged, here's some ways to think about your new role in the company and how you might be successful here."

Saar Gur advises on the importance of guiding founders through transitions in their roles, ensuring they remain productive and engaged with the company.

• Saar Gur's latest favorite book is "The Wright Brothers" by David McCullough.
• He admires the story for showing how individuals with a vision can have a significant impact on the world.

"So my latest favorite from the summer was the Wright brothers by David McCullum. Lots of reasons, I love it, but it shows that two brothers in a bike shop in Ohio can change the world against what everyone else in the world was thinking at the time."

Saar Gur explains that "The Wright Brothers" is his favorite book because it demonstrates the power of innovation and determination, even from an unlikely source.

• Saar Gur believes the venture capital industry needs more diversity.
• He points out that many promising businesses are not funded due to biases within the predominantly white male industry.

"Know, I definitely don't think we need more vcs, but we definitely need a lot more diversity and venture."

This quote emphasizes Saar Gur's view that the venture capital industry does not necessarily need more investors but does need a wider range of perspectives and backgrounds to support a diverse array of businesses.

• Saar Gur expresses concern about the behavior of the President at the time of the podcast.
• He finds it challenging to explain the President's behavior to his children.

"Really scared about our new president and continue to have to figure out how to explain his behavior to my kids."

Saar Gur shares his personal apprehension regarding the President and the difficulty he faces in discussing political matters with his family.

• Saar Gur's preferred source of information on startups is TechCrunch.
• He enjoys staying informed about new and innovative startups.

"I have to say, it might be cheesy, but TechCrunch because I love learning about all the cool startups out there."

This quote reveals Saar Gur's interest in the startup ecosystem and his choice of TechCrunch as a reliable source for news and updates on emerging companies.

• Saar Gur measures his short-term success by the impact he has on founders.
• His long-term goal is to work with foundational companies that have a lasting impact and are remembered by future generations.

"My short term success is probably what my founders say about the impact that I've had onto their successes."

Saar Gur values the feedback from founders he has worked with as a measure of his success.

"And my long term goal is I dream of working with these foundational companies that have a big impact in the world and ideally are around when my grandkids are around and their grandkids, and they could look back and say, your grandfather helped, had an impact on starting or building that company."

This quote outlines Saar Gur's long-term aspirations to be part of companies that make a significant and enduring contribution to the world.

• Saar Gur's recent investments have been in early-stage, stealth startups.
• He attributes his investment decisions primarily to the quality of the team.

"So funny enough, it would go back a while. My last four investments have all been stealth very early, but the answer as to why I said yes is very easy. Team? Team."

The quote reveals that Saar Gur's investment strategy focuses heavily on the team behind a startup, indicating his belief in the importance of strong leadership and team dynamics for success.

• Foundersuite: A CRM for raising startup capital, boasting over $130 million raised by customers since March 2016.
• Greenhouse: An applicant tracking system used by innovative companies to hire great people.

"Foundersuite customers have raised over $130,000,000 in seed and venture capital."

This quote promotes Foundersuite as a successful tool for startups seeking investment.

"Greenhouse currently works with over 1500 of the world's most innovative companies, such as Airbnb, Slack Snap Inc. And Lyft."

Saar Gur highlights Greenhouse's role in helping top companies recruit effectively, underscoring the importance of hiring the right candidates for business success.