Finding the right investors and raising funds are necessary components to grow a startup. As entrepreneurs, this process can be nerve-wracking. From the initial meeting with investors to the demo, entrepreneurs will be carefully scrutinized and vetted as investors are not only investing in the idea, but also the founders that will grow the company.0

Amidst this preparation, the very first thing an entrepreneur may notice is the title associated with the investor. While this may seem inconsequential, it is important for entrepreneurs to understand the hierarchy of venture capital firms and with whom they will be speaking.

 

Partners:

At the highest level, you may see a business card with the title of “managing director,” “general partner,” or some derivative of it. Partners at this level will suggest and vote on whether to invest in a company or not.

But not all partners are made equal. In the day and age of fostering work creativity and culture, companies have opted to redefine work titles like “office manager” as “office ninjas” or “Marketing Director” as “Director of Storytelling.” Similarly, while VC firms are not nearly as creative with job titles, a “partner” can in reality mean a “principal” or a “director.”

 

Principal/Director:

Principals and directors are next in line within the VC hierarchy. The responsibilities of Principals and Directors can be many. From deal sourcing, working directly with the portfolio company, or introducing the entrepreneur to other key players, they will usually help in multitude of ways.

Usually, principals and directors will not have the power to make a final decision on whether to invest or not. However, their power to influence a decision should not be overlooked. Because of their experience, vast network, and involvement with the deal, their feedback and recommendation will go a long way.

 

Associates:

Associates are not deal partners. But they are gatekeepers and usually the first point of contact for many entrepreneurs who attend events or workshops. Thus, it is important to keep in mind that while associates may not lead investments or have the power to swing a vote, they can be the first source of information for partners inquiring about your company.

 

Analysts:

Analysts are the most junior on the team. Their power to influence decision-making will be minimal.

The title of the person can influence our attitude towards the other person. Nonetheless, entrepreneurs should not forget that the same social rules that govern our daily interaction with family, friends, and co-workers also apply to VC’s and investors. So even though one may be inclined to adopt a dismissive attitude towards an associate, these associates may soon become partners. And they will surely remember the pleasant (or the not-so-pleasant) meetings they had when they were at the bottom of the hierarchy.