When you consider breaking into the Venture Capital world, in addition to the major wildcards of actually finding a position, there is an additional checklist of questions you need to mark off:
- How will I add value to a given firm?
- Will I be respected by entrepreneurs?
- Do I give good advice?
- Will I be welcomed onto boards?
- Am I capable of making partner or am I a two year grunt?
The Venture world is scary. I was advised by no less than half a dozen seasoned partners at top tier venture funds that taking a job as an associate (or even a senior associate/principal) was a serious mistake. The reason? I haven’t had lead positions in growth tech companies such as Facebook or Twitter or even a Grubhub, Asana, or Uber. My experience is limited to a couple of small poker/gaming companies, both of whom were successful, but neither of which were venture backed or scaled to $100M companies. Looking at the bullets above, those who advised me to get more operating experience were basically saying: you can’t be trusted because you haven’t been there & you haven’t seen it firsthand. You’ll be relegated to research roles and never given the opportunity to make strategy or investment decisions.
There’s a lot of truth to that assessment. And I gave it a lot of thought. But the reality is that I learned a lot working with smaller early stage tech startups. One of those startups built a virtual training platform, focused on its community for retention, not unlike a Coursera or Udemy. The other was a suite of software analytics apps which is now transitioning to be fully cloud based, not unlike…well…every single software company in existence. We made a lot of mistakes at those companies and never fully trusted our gut in building them for mass-markets rather than simply the gaming world. But I also learned a lot – about consumer behavior, distribution channels, and engagement metrics. The difference between those companies and the $100M+ companies which operate similar platforms was our tunnel vision in thinking too small, too niche, and not recognizing the applicability of our services to multiple verticals.
But with mistakes comes learning. And I feel confident that I saw enough at my prior companies to be a valuable advisor and investor at early stage companies. I recognize that I am unqualified to add value during the later growth stages of a company’s lifecycle (and those are skills I do want to buffer over the next few years) but as an early stage VC shop focused on companies at the seed level, my experiences in early scaling, early growth, cheap PR/branding, and creative customer acquisition are entirely applicable and highly relevant.
But it took me a while to reach this realization. As I interviewed with VC firms and sought advice from experienced partners, I was often complemented on my hustle and creativity, and demoralized that I hadn’t been employee #6 at Twitter. But as I’ve met with more and more startups, I’ve learned to recognize where my strengths are – where I’m darn confident that I’ve been there before, seen the pattern before, and can add a lot of value. And I’m so starting to speak out. I’m becoming more assertive with our portfolio companies when I see them making the mistakes I’ve made before, and I’m becoming more assertive in meetings when I want clarity on issues that I really do understand.
Mark Suster recently wrote a phenomenal post on defining one’s personal brand. As a budding VC, I don’t want to be defined as solely an analyst/grunt. At the same time, I don’t want to be defined as an overconfident, inexperienced investor who doesn’t add sufficient value. And that’s why I will keep looking for opportunities to get involved with later stage growth companies, either as a biz dev consultant, advisor, or potentially an employee down the line when Chicago Ventures raises its next fund. I want to be defined as extraordinarily creative – and deeply balanced: focused on growth.
It’s a separate post, but Roger Lee at Battery Ventures recently noted that the presumed advantage of operating partners is “ancient history” given how commoditized that value is becoming. Josh Koppelman at First Round recently said something similar – that his operating experiences from 2002 simply aren’t relevant to the channels in 2013. I want to be the VC who is never satisfied with his experiences, no matter how deep they become, and is continually focused on growing, learning new patterns, and staying highly relevant. That’s where I will stand out.
I’m learning to become more confident and speak out in areas where I’ve fought and battled & won and lost before. But I’m hopeful that I’ll stand out over the long term by never taking experiences for granted and continually learning firsthand.