companies. Furthermore, their expenence with a wide range of companies and industries gives venture capitalists knowledge of problems that are likely to arise and ways in which to handle them. Venture capitalists typically have a great deal to contnbute, and entrepreneurs should take advantage of lhat. Looking a bit deeper, there are reasons for these misconceptions, but there are also ways for venture capitalists to combat them. With regards to venture capitalists only being good to write checks, ihere is probably a certain sentiment about venture capitalists just being money-hungry, and all they care about is making more and more. To an entrepreneur that doesn't have a lot of venture expenence, it may just be natural to think these nch guys with all this money probably have nothing else to add except for their cash. Many entrepreneurs may not even want to be lectured or advised by a venture capitalist, possibly triggering an insecurity or creating anxiety about being watched over their shoulder by the venture capitalist. Either way, I have found that the best investments are value-add investments where the venture capitalist is clearly not running the company, but actively participates on the board and is willing and able to help in times of need, and where the entrepreneur is capable and confident about his or her business plan but willing to listen, take advice, and sometimes give in to suggestions that may be more suitable than their own. With regards to not understanding how limited partners can influence the investment policies of the venture capitalist I think the cause is fairly simple: There are not many venture firms in the country. We are a tight and small community and have been notorious for keeping a tight lid on how exactly we do business. In the 1990s, you'd be hard pressed to find more than a dozen books in any library truly focused on venture capital. This has changed recently, but the inner workings of a venture capitalist are still mostly unknown to entrepreneurs, especially those who have never dealt with venture capitalists before, and those are the majority of the ones raising money out there. Further, venture firms have complicated structures. Understanding a term sheet and the terminology and deal structures we tend to use with companies is a task of its own, but 26