In Season 4 of The West Wing, Martin Sheen’s Mr President reminds his advisor Josh Lyman to be “the guy that ‘the guy’ counts on”. 

Mr President is ‘the guy’ and he is constantly reminding his advisor not to forget that. Advice is the sum of content and delivery and Josh is sometimes bad at both, forgetting his role in the relationship. 

Deciding on the right advice and giving it well is hard, but through the course of the West Wing, Josh improves his style. He begins to communicate socratically, ask the right questions and occasionally deliver a friendly boot. 

Much like Josh, VCs are not on the field with ‘the guy’ and are guilty of overreaching in their advice. Great investor advice requires empathy and anecdotes that expand a founder’s agency to solve difficult problems. In this piece, we explore how the investor-founder relationship can be grounded in trust, what good advice looks like, and how it can be best delivered. 

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The advice problem

Unfortunately for venture capital firms, which are largely service-based businesses (providing money and company-building support in exchange for equity), valuable advice is a non-obvious proposition. It is not sweat equity, but sweat is encouraged. 

Value can often be reduced down to key rolodex connections in advisory networks (hiring, customers, etc). Of course, in many cases, strategic advice that expands the founder’s thinking (vs. replacing it) is also valuable to help expand revenue, conserve cash, etc. 

In particular, many VCs have a growing commitment to investing in Talent solutions for their portfolio. Building high performing teams is a challenging area to navigate as a founder, and access to high quality advice in this domain is tricky to find and validate. VCs are often in a great position to share best practices across a portfolio, usually through a Head of Talent. 

At Seedcamp, we have built a vetted pool of individuals interested in joining our startups. Alongside this pool, our portfolio employs almost 100,000 outstanding operators, many of whom move within the Seedcamp Nation when they are looking for their next journey. We give founders access to this microeconomy, as well as help them source or headhunt select candidates from outside it. Great startup teams all look different but hiring the absolute best operators is mission critical from Day 0.

Advising with trust

Talent aside, a lot of more general company building advice that sounds clever and useful along the previous lines, doesn’t become clever for several years, if at all. In the period of waiting-for-advice-to-prove useful, it can also cause distractions. There is an incredibly long feedback loop on advice in tech and one reason that VCs like Twitter (now X) is that they can actually get real-time feedback. 

The “Untrusted Advisor” is, of course, a pun on “The Trusted Advisor”, a seminal book by Robert Galford, Charles Green, and David Maister about the relationship between advisor and advisee. The authors cite five steps to build a resilient relationship, of which the fifth is the most important. It stipulates that an advisor is a partner in your business, not a banker. i.e., although the relationship may be fundamentally transactional, it shouldn’t feel that way.  

When VCs and founders collaborate well, it is from a position of familiarity and ideally, trusting fondness. Instead of being transactional, the relationship between founder and VC can be driven by a sense that both parties are authentic at a bare minimum, so that the relationship can blossom to a stage where you leverage the best of both parties. 

Paul Graham’s famous Y Combinator dinners have become a parable for techies about the importance of trust. In an early call to arms, Graham even noted that attendance at dinner time would improve the likelihood of investment. He cooked the food himself and encouraged founders to share their projects openly; you could assume that another founder wouldn’t thieve your most compelling ideas. The camaraderie between founders and investors has become legendary.

At Seedcamp we take the view that all advice is given with a view to expand a founder’s toolkit to solve problems. That ranges from the very direct – a talent or customer introduction – to the very specific – how to manage fx and treasury risk – to the very strategic – at what point a GTM lead should be hired in the US and in which city.

These vary in importance at different junctures of the journey, and in our next piece, we will dive into how talent advisory specifically can impact the business.