What Venture Capital Has to Teach Us All About the Primal Importance of Communications

AI is making companies form extremely quick, eroding competitive moats faster than ever. But it is also providing once in a lifetime opportunity to those who see the future of their industry and describe it better than anyone else.

CEOs who can do this well will be rewarded handsomely. APCO research shows that the majority of Americans report greater brand loyalty to companies whose leaders are visible and articulate the company’s vision, strategy and direction. This extends to talent, too: 74% of Americans report that CEO reputation influences whether they would consider employment at a given company, with that statistic rising to 83% among today’s workforce. Operating largely out of the public eye, emerging only to ring the bell or weather the storm, is no longer a viable option for securing the long-term financial growth of a company. People want their CEOs at the pulpit from Monday to Sunday.

The best venture firms have been obsessed with storytelling from the very beginning. No one knew this better than the late Don Valentine, who founded Sequoia Capital in 1972, now one of the biggest venture capital firms (VCs) in the world. He left us with this enduring advice: “Learning to tell a story is critically important because that’s how the moneyworks. The money flows as a function of the stories.”

Wisdom of this caliber does not go out of style. Ben Horowitz, who co-founded Andreessen Horowitz (a16z) in 2009, shared a similar view: “Companies that don’t have a clearly articulated story don’t have a clear and well thought-outstrategy (…) The company story is the company strategy.”

Why Are VC Firms Obsessed with Communications

VCs’ obsession with story does not bear only on their portfolio companies—it bears on the firms themselves.

In the past, it was uncommon for a venture fund to offer direct communications support to its portfolio just as it was rare to have professional communications around the VC firm itself.

This is no longer true. Today’s winning venture capital firms understand that exemplary communications are mission critical. Limited partners (LPs) expect clarity and conviction from the managers they entrust with capital. Co-investors look for partners who can articulate a thesis and operate transparently. Founders gravitate towards firms whose reputation signals discernment, support and reach. Media and broader ecosystems shape the narrative environment in which all of this plays out.

Being Liked Begets Better Deal Flow

VCs are haunted by two things: the deals they do where they get it wrong, and the deals they miss entirely because people didn’t share it with them. The heart of venture is “seeing,” the ability to identify founders whose ideas carry the promise of genuine market disruption. But that ability only matters if a VC is exposed to the right deals—and that depends on being popular. Venture is a small world, where competitors are co-investors and where today’s founder is tomorrow’s investor. Reputation compounds quickly. The firms that communicate clearly, consistently and credibly are the ones that build the strongest relationships, and in turn, the strongest deal flow.

Portfolio Companies Live or Dive by Their Story

For VCs, strengthening portfolio-company communications is a hedge against early-stage fragility. Sharper stories increase the likelihood of attracting sophisticated co-investors and strategic partners—especially important when the runway is short. For the startups themselves, strong storytelling helps attract talent and win customers.

Especially at the very early stages, portfolio companies are selling little more than a big idea to their investors and potential investors—they have achieved proof of concept but have yet to determine product-market-fit (with the important caveat that the underlying technology or capabilities must be as real and mature as claimed). At the same time, they often lack the resources and discipline to translate the value proposition of their company. VCs that step in at this stage understand that the difference between an A-level pitch and a B-level one can ultimately determine whether a company secures its next funding round or goes belly-up.

We Should All Share Venture’s Obsession

In VC, the highs are high, and the lows are low. The personalities are colorful, and the stakes are sky high. But it’s also an environment where thoughtfulness and deliberation pay off. The best VCs take communications seriously because they can be make or break for the firms themselves, and for the companies they invest in—and thus the ultimate determinant of their success or failure. Nearly any business would benefit from venture’s healthy obsession with the power of story and the importance of broad, long-term trust.

In a world that moves a mile a minute, companies need communications partners who think rigorously about how best to position the company across a wide range of scenarios. That foresight creates clarity amid a shifting landscape and prepares companies for what comes next. The winners will be those that can cogently tell their stories to the audiences that matter most.