Being One-Up with VCs

In my early career, I worked for one of the most innovative non-profits in the world. In terms of reach and influence, we often punched above our weight.

We weren’t the Red Cross, but over thirty-plus years Teach For America built a rare track record in terms of influence and impact.

When I left the industry and moved into software, I focused on seed-stage businesses because I believed the learning curve would be steepest there.

In these orgs, I noticed that the power dynamic between the business and the market was quite different.

Before, the headline was:

“Innovative teacher leadership non-profit of 1500 employees and 60,000 alumni seeks expansion of nationwide impact.”

Now, it was:

“Venture-backed team of 20 seeks partnerships with vertical-leading brands.”

I was accustomed to having leverage. Now that I was selling to/through VCs, keeping leverage felt even more critical.

I became curious how I might clearly convey the unique power of new entrants in a sales context.

The One-Up Position

Last fall, I stumbled upon Anthony Iannarino’s concept of the “One-Up Position.”

He writes:

In other words, quit selling transactionally and focus on providing good counsel.

This was a delightful frame that seemed to justify how I was approaching my partnerships with VC investors.

In the market, I wasn’t saying “Will you please buy my startup’s product?” I was saying, “We have unique experience that will 5x your company’s valuation.”

This mindset, applied across our senior leadership in conversations with investors, generated some of our best prospects.

Being One-Up with VCs

I encourage anyone considering GTM relationships with investors to carefully consider what comprises their “One-Up” position.

VCs are powered by information and survive on information asymmetry. (This is how you may get stuck on a call with an analyst conducting a survey about sensitive business metrics.)

They use information to create an opinion about the market and if, where, and how to invest.

Consider how you may create a foothold for a real partnership by contributing to that process.

• What prospect trends are you observing?

• What is possible with your product that may go against current expectations of monetization or time-to-value?

• Generally speaking, what kind of value are your customers seeing?

• What kind of lift is needed to realize that value?

Bringing that value forward without giving away the game is how maintain your One-Up Position with VCs.