Return-on-Coaching for Venture-Backed Founders
Unleashing our secret weapon: a coach-in-residence
“If I were coaching you, I would say …”
That’s how it all started. I didn’t remark on it the first couple of times Dalglish said this in conversation. It soon became clear that something had shifted. I never intended to be coached – in fact, I’ve always been skeptical about the entire business of coaching. Wonderful that it’s worked for others, but I’ve never felt the need. One year on with Dalglish as my partner and coach-in-residence at Avalanche VC, no one is more surprised than I am that I’ve become a believer.
I started Avalanche VC alone. Building this firm from scratch, I thought my biggest challenges would be tactical – raising capital, marketing, and conducting deal analysis. When I was first introduced to Dalglish a year ago as he was leaving McKinsey, I figured that it was going to be his analytical and problem-solving chops that would make him a good partner. I didn’t pay too much attention to the fact that he was also a coach. I figured that, at best, it would be a side benefit offer to our portfolio founders.
One year on, I’ve gone from skeptic to convert.
Don’t get me wrong – Dalglish and I do plenty of problem-solving and analysis together. But having a coach on my team has become way more than a side benefit. His role as coach-in-residence has become central to our support for portfolio companies and our diligence process. But most importantly, it's vital to my ability to perform at my best.
I joke that Dalglish is Wendy Rhoades to my Bobby Axelrod.
You'll understand the reference if you’re a fan of Showtime’s Billions. Having Dalglish on my team is like that, minus the drama and the constant threat of SEC investigation (of course!). Coaching doesn’t just happen in one hour every two weeks. It’s happening all the time, in every meeting and discussion. It’s now “in the water,” making it a game changer.
Dalglish reminds me to double down on me at my best
It’s commonplace in venture capital that we celebrate the contrarian, the outsider, and those who go against the grain. Anyone who’s spent any time in the ecosystem knows that the real experience is often that of crushing conformity and the relentless pressure of meeting others’ expectations. Founders experience this a lot, and may be surprised to learn that VCs do too.
Those who know me know that I’m a fighter. I hate convention, and under pressure from others, I double down on my beliefs. But even the best of us get lost sometimes. While raising Avalanche’s Fund II, I repeatedly found myself boxed in by what I thought LPs wanted me to say. It often felt like I had to choose between being myself or being successful, but I couldn’t have both.
I didn’t know it then, but this is the exact situation where a coach comes in handy. Without getting into the gory details, Dalglish has helped me see that my belief that I had to choose one or the other wasn’t real. He’s helped me remember that I’m at my best when I speak from my convictions rather than pander to what I think others want to hear. It all became real in a recent meeting with a potential LP, where I took a risk and decided to give up the filter. “I know most people want to hear me say this, but here’s what I really believe.” It was one of the best conversations I’ve had in months.
What we talk about when we talk about coaching
It’s no secret that the field of coaching continues to be an unregulated “wild west” with few barriers to entry. Despite the best efforts of the International Coach Federation, “coaching” continues to be a loose, baggy term that includes everything from the leadership and executive coaching that Dalglish does to Reiki energy healers and content creators trying to sell you their handbook du jour.
There’ve been plenty of academic attempts to define coaching, so we won’t rehash those here. Coaching is a learning and development intervention grounded in facilitated self-inquiry. What distinguishes coaching from other forms of learning is that it is individualized, self-directed, and relational.
Also, unlike other forms of learning, the outcome is rarely new content. Instead, the “unlock” can often feel like remembering something we already knew, but with a newfound ability to put it in action. As AI continues to eat our collective lunch, learning of this deeply human variety will become more important. Leadership, EQ, and behavioral change are not built linearly but through step changes, and bursts of epiphany, followed by reinforcement over time.
If everyone can call themselves a coach, how’s Dalglish any different?
He has the right credentials and experience, but is that what makes him a good coach? Maybe, maybe not. For me, (Katelyn), Dalglish’s most important qualification as a coach is that he understands the game I’m playing, and is at least theoretically qualified to play the game himself. That bedrock of credibility and respect forms the basis of our coaching relationship and makes it work.
Doing the inner work to unlock outer growth
As an investor, I spend my days in an effort to master the external world. My job description includes analyzing, diligencing, fundraising, networking, pricing, strategizing, and exiting. My career lives and dies by my ability to do these well. That ethos gets passed on to our founders – we expect them to be building, shipping, selling, closing, raising, and scaling.
Anyone who’s spent enough time in the venture ecosystem soon realizes how much of an inside job it takes to deliver on this external work. I wake up every morning knowing exactly what I have to do. What gets in my way is rarely a lack of skill, knowledge, or expertise. I rarely need help solving a problem. I need help becoming conscious of the defenses, biases, and patterns that limit my view of the solution space. Adult learning theorists call this “subject-object shift,” and it’s incredibly difficult to do alone – which is where Dalglish comes in.
Everything I’ve described here applies to our founders as well. We invest in founders with skills, knowledge, and expertise in spades. As an investor, I love playing the external game and helping my founders do the same. But I’ve been a VC long enough to know that founders are humans first, and sometimes the unlock that needs to happen is internal. When our founders find themselves getting in their way, Dalglish helps them get unstuck.
All this may sound “touchy feely” or “woo-woo” to some, but it isn’t.
There’s plenty of research demonstrating (a) that the awareness and management of one’s own and others’ emotions (also known as Emotional Intelligence) predicts both investor and venture performance, and (b) that coaching interventions can help develop this intelligence. Dalglish has conducted a comprehensive review of the academic literature on these claims.
What this means for Avalanche VC:
At Avalanche, we invest in companies transforming how people learn, earn, and own. It’s no coincidence that learning takes pride of place in that triad. Our commitment to coaching is above all a commitment to learning at all levels of our fund:
We invest in learning technology. We invest in companies that help us learn better, companies that use technology to help us learn, and founders who are themselves committed to learning. We believe learning never ends, and coaching is one way we apply that maxim rigorously to ourselves.
We know best practice pedagogy and what drives efficacy. We share decades of experience in education between us. We’re grounded in the research on what works when it comes to learning and development from pre-K to gray. We offer coaching because it works.
We learn about and with our founders. We invest in our founders not only as founders, but as humans. It’s important for us to understand who we’re working with. And we invest in founders who are always learning. That’s why we’ve embedded coaching across our process from pre-investment diligence to post-investment founder support.
One concrete way we practice this commitment is in our diligence process.
Dalglish spends time with each founder individually, using coaching as a vehicle to understand what makes them tick and how we should personalize our support. It is a non-evaluative process that helps us identify founders’ gifts, their growth edges, as well as the places where they’ll need more help. It also helps us correct for bias in our investment decisions, and gives us more complete information for value assurance across the investment lifecycle.
Since we’re believers, will Avalanche invest in ventures focused on tech-enabled coaching?
While we’re believers in the power of coaching, we’re skeptical that it can be venture scalable without diminishing the profoundly human and relational aspects of what makes it powerful. Both technology and coaching have a role to play in empowering modern work, but their relationship to capital is entirely different.
Even before SVB’s collapse and the breakneck speed of developments in AI, the venture ecosystem has known for a while that founders bear incredible emotional challenges and psychological strain. As risk and uncertainty continue to grow, players are increasingly grappling with what it really means to support founders. For us, having a coach-in-residence at Avalanche is more than a pledge, a promise, or simple encouragement to founders to take care of themselves. We’re rolling up our sleeves to do our own inner work to unlock growth, and doing whatever it takes to help founders to do the same.