Thinking About Thinking

The Magic Words

Posted in Venture Capital by larrycheng on January 5, 2010

I heard the magic words yesterday from a couple of my portfolio company executives that just warms my heart as an investor and board member.  Those magic words are: “I want to invest in the company.”  In a prior post, Founder Liquidity, I wrote about how founders/executives not selling shares when they have the opportunity is a big vote of confidence in the company.  But, an even greater vote of confidence is when founders and executives want to invest their own capital into the business.  I love it when a senior exec steps up and breaks out the checkbook ready to write a check.  I’m trying to think if there’s any gesture that gives me more confidence in a business, and it’s hard to think of one.  That’s the kind of alignment and confidence I like to see. 

As I think about my own portfolio, about 2/3 of the companies have taken some form of debt or equity investment from someone(s) on the founding or senior executive team.  While you don’t have want to have too many individual shareholders, key execs writing meaningful checks is a good thing in my book.