I enjoyed this post today from Simon Acland, former managing director of Quester and author of “Angels, Dragons and Vultures – How to tame your investors… and not lose your company”.

Simon points out that no matter how thorough a VC can be during the initial investment phase, the true portfolio home runs are almost always in instances in which the company and/or market conditions have evolved differently than expected.  Backing strong management teams is arguably a far more determining factor of future success.  I think he encapsulates perfectly the link between the management team and the VC’s role as follows:

So if I had to pick the single most important thing that makes a good venture capitalist, I’d say it is the ability to work with entrepreneurs after investment and to harness their energy to maximum effect. That means standing shoulder to shoulder with them, aligning interests instead of constructing complex, divisive and demotivating deal structures. It means clearing the clutter from their path, not trammelling them with unnecessary bureaucracy, veto rights and similarly tiresome obstacles. It means helping them to concentrate on the issues that really matter by focusing on those issues yourself. It means winning their respect so that you can help them resolve the really sensitive problems, like when to part company with their co-founder or hire their own replacement. And above all, it means making them feel that their company is still their company after your investment.