When dating with prospective portfolio companies, we often get asked about our role in our portfolio companies. How much hands-on are we? Do we interfere in the founder’s decisions? Our reply to that is: “As you wish“.
We are a team of entrepreneurs who have seen that and did that. We have deep vertical expertise in different areas, but we do not push anything. If you wanna go your way, fine with us. If you wanna ask for our experience (and then do it your way), even better :-). We seldom ask for extensive veto rights or Board seats. We believe in accountability of the founders and to be accountable, you need to be in the driver’s seat. Our central value is to support the founder: with finance, with experience, with contacts, with being someone they can trust.
Do all of our founders ask for help? Nope. About 20% prefer to be left alone. With the rest we try to help as much as we can.
I just finished reading of this article and I find it disgusting. That manager says he works for Elon Musk, but in fact he works against him. Anonymous well poisoner.
Tesla is in war time, billions of dollars are working against its success. War generals must have 100% loyalty of their men and must sacrifice all those who work against them. Moreover, what a general! This one is not hidden in insulated headquarters, he fights right in the middle of the battlefield. He works long hours with his men and sleeps at the factory, if need be. In his 46 years, wow. He also does mistakes. The image of him puffing pot was a mistake. But who does not do mistakes? Only he, who does nothing. Are the critics vowing for the prototype of the grey-hair CEO, only seen in boardrooms with mouthful of nicely rehearsed but empty phrases? He, who is so afraid of making a mistake, that he makes nothing?
A CEO who is focused on winning the war, must build his team on people he can trust. Who are loyal to him and are not bravo soldiers who would trade him in if they see it worth. Of course – building a management upon people whose only qualification would be worshiping their leader wouldn’t work. However, still better than having frenemies there – people, that work against their leader.
Did we put our money where our mouth is? Oh yes. More than €3 million worth of confidence in Elon Musk and the leadership style he represents.
Your investor is your partner in good and in bad times. You need to get along well with him – similarly that you need to align values with your partner for life. And that requires some picking, right? Are you selecting your life partner by sending an unsolicited email to all the girls you were able to get the contact to? Showing off your refined muscles, time of your last Iron Man race, a carefully selected picture of your striking BMW and inviting them to tender offers?
Yet many startups are doing exactly that. They download an extensive database of investors somewhere. The more, the better – they do not care about the profiles. They send out an unsolicited bulk pitch … and hurry up, you stupid investors, we are the hot girl in town, so send us your proposal by August 12, 12:00 PST. As little diligence they put into selection of the investors, the pitch itself is almost inadequately rehearsed. The best colors, photographs, charts, buzzwords, the right CAGR of 60% and 30% EBITDA … and skillfully hidden “projected numbers” disclaimer :-).
This behavior is unfortunately endorsed by many investment boutique advisers, who only care about their commissions. The higher the valuation gets, the higher fee they charge. Nothing else matters – a contract with a devil with higher fee is better than a contract with a real partner. Who gives a fuck?
We at Reflex Capital do not believe in partnerships that are only based on money values. We do not need a superpitch. On the contrary, our bullshit detectors start flashing when we get one. We need to see your desire to have us as your partner. And then, maybe, the desire will be mutual and we’ll create a partnership that lasts.