Sailing. That’s what I want to talk to you about. ‘But I thought this was supposed to be a VC blog?’ It is. Just bear with me.
I’ve always dreamt of sailing around the world. Some time ago I decided that was exactly what I would do. Other than occasionally joining a friend on his boat, I did not have a whole lot of experience. But I figured that shouldn’t be a problem. I bought a small but seaworthy sailing boat. It needed some work in order to be ready for serious ocean sailing. I had only a vague idea of what exactly needed to be done. No problem, I thought. It’s just a matter of involving an expert. I made an appointment with a boat builder. I had come across his name in one of the many ads he placed in sailing magazines. We met at his huge boat yard. All sorts of sailing boats were being serviced and built in the yard. I had obviously come to the right place.
Over a cup of coffee I explained to the boat builder that I wanted to make a circumnavigation and needed to get my boat ready for that. I talked him through the current state of my boat. He smiled, stood up and walked to a table stacked with brochures. ‘Here, this is what you need.’ He handed me a brochure for a battery charging system. ‘I’ve done countless refits on boats going on big voyages. This is crucial. When you’re in port, you need to be able to get your batteries charged as quickly as possible. This system will charge them in about three hours. Your current system would take many hours more to charge them.’ He made a gesture as if flipping coins in his hand. ‘True, it’s expensive,’ he continued. ‘But it’s worthwhile.’ I looked at him with a puzzled expression. ‘Of course there’s some other stuff you may need to take care of as well,’ he went on. ‘You might want to get a better autopilot, for example.’ He listed other things he thought I might want to have him add to the boat. I wasn’t really listening anymore. The amount the folder mentioned was outrageous. Did I really need that charger? It didn’t make much sense to me. The one that was installed on the boat was fine. But then again, this guy must know what he was talking about. He had done many refits before.
That is now a few years ago. It feels unreal. Writing this blog for our new VC book while I’m at anchor off a Pacific island. Just as over the past months it was unreal to combine working on the book with my circumnavigation. I made it to the other side of the world. No thanks to the “expert”. As I’m writing this blog, my wind generator is whizzing contently in the trade winds. The solar panel is churning out amperes in the bright tropical sun. My shore charging system does what it has done for at least 90% of this voyage: absolutely nothing. Most of the time I’m either sailing or at anchor. There is no shore power. Luckily I followed my gut feeling. I did not listen to the “expert”.
It could very well be that he had only done refits for people who regularly stopped in marinas. Maybe he was an expert for that category of sailors. Be that as it may, in my particular case his advice was no good. After having spoken to him, I realized I needed to do my homework before I started refitting the boat. I couldn’t just leave this up to others. It was going to be me out there on the ocean, not them. I read up on blue water sailing, spoke to sailors who had made a circumnavigation, and then decided what work I wanted to get done on my boat. Tailored to my specific needs.
That – finally – brings me to Venture Capital deal terms. Every transaction is different. Each one has its own peculiarities. Only persons who understand those peculiarities can structure the optimal deal. But they can only do so if they also truly understand the deal terms. If you are not a VC deal term expert, it might be good to involve an expert. But if that expert does not come to fully grasp the peculiarities of the deal (including in particular those of the company and employees involved) it could be a case of “expert, schmexpert”; you might end up with a deal that isn’t as good as it could and should have been.
With our book, I am convinced anyone involved in a VC transaction (even if such person has no previous VC experience) can become his or her own expert. That, I believe, is the best way to ensure you end up with a deal that truly works for you.