Not that long ago, venture capitalists took relatively passive roles with their investments. Besides a decent rate of return, the only expectation was really just a seat on the board. It was the epitome of a transactional relationship.

Today, all that has changed. With the exception of maybe a few remaining “traditionalists,” most VC relationships are becoming more similar to partnerships.

VCs now get involved with their investments; they want to add value to them. It isn’t unheard of for VCs to mentor entrepreneurs, offering everything from political capital to network resources to strategic advice.

Consider the relationship between Tumblr founder David Karp and Spark Capital’s Bijan Sabet. The two met in 2007 when Tumblr was just one of Karp’s side projects. After getting to know one another, it was Sabet’s advice that led Karp to launch Tumblr as a business. In fact, Sabet never left Karp’s side, taking an active role in the startup until its $1.1 billion acquisition by Yahoo in 2013.

But these relationships are largely dependent on more nuanced dynamics, like mutual respect and trust. You can’t expect to walk in, hold out your hand, and secure funds—it doesn’t happen like that.

For this reason (and many others), I always recommend approaching relationships with VCs in the following ways:

  1. Assess your business model. Before seeking venture capitalists, take a look at your business to determine whether funding fits. VC money is a necessity for some businesses, but may not be suitable for others. For example, a startup working in an industry with relatively high upfront costs for growth or expansion might benefit from this type of funding, whereas a company intending to run a regional operation may not need it.
  1. Build a rapport. It’s important to build a rapport with VCs before seeking funds, not just to increase the likelihood of investment, but also to establish actual relationships. You’re entering into a partnership, and you want it built on trust and respect. This is a process that takes time, so make sure you’re in it for the long haul.
  1. Get to know the terminology. Navigating investments will require legal counsel, but it’s still important to understand the terminology involved with negotiations: pre- or post-money valuation, convertible note interest rates, anti-dilution, and more.
  1. Resolve how you intend to spend the money. Be aware of your plans for the money and how much you need to spend to execute those plans. VCs don’t like to hear ranges—it makes it seem like you’re unsure of the resources you need to launch.
  1. Clarify the type of investment. Lead investors usually write the biggest checks. As a result, they’ll set the valuation, terms, and so on. On the other hand, co-investors act as price takers, waiting until the terms are set. Make sure you know the relationship you’re advocating before leaving the conversation.
  1. Understand the terms of the agreement. Because you’re essentially entering into a partnership with a VC, make sure the terms of the deal are constructed in such a way that the incentives align with your strategic vision for the arrangement.
  1. Begin with transparency. Being transparent with investors is critical. Most of your company’s red flags will come out with due diligence on the investor’s part, so it’ll look better when you’re honest about your struggles early in the process (rather than waiting for a VC to discover them on his or her own).
  1. Ask for help as needed. The most productive relationships develop when founders ask for help when they need it. And while VCs always look for ways to help, “the more you ask, the more you’ll get.” The startups our company works with get the most value from us when they communicate and proactively tap our resources.

When deciding whether to take VC money, realize that you’re inherently increasing expectations around your business. You’re giving up partial control by having to report to someone else about how you’re performing. It’ll very much change that feeling of “being your own boss.” But once you secure outside funding, it becomes a team effort—one where all parties involved are working to make your venture a success.

About the Author

Arteen Arabshahi is a Senior Associate at Karlin Ventures, an L.A.-based venture capital firm that focuses on early-stage enterprise software and marketplaces. Follow the company on Twitter.