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Picking a VC is hard. So I thought I’d write about out with what I would look for in a VC knowing what I know now and why. Most VCs are book smart. VCs should be more of a coach than proscriptively telling you what to do. You don’t really have much to go on to decide who would make a good fit.
I was having dinner with a friend last night and we were chatting about venturecapital and a bit about what I’ve learned. I know I can’t be in every deal and I know that the easy part of being a VC is writing the first check in a deal. If an accelerator is writing you they’re also writing 25 other VCs.
Beware of VC Seagulls, who shit on you and then fly away (or worse yet leave you with Red Herrings). I write this post as a warning to pick your VC’s carefully. I like to say to first-time entrepreneurs, picking a VC is more permanent than marriage. I guarantee this is a bad VC. There are many great VCs.
As a result I didn’t write my first venturecapital check until March 2009 – exactly 5 years ago. I divided success into the phases of venturecapital and 18 months into writing my first check here was my view (details on each in the link above). Sourcing high-quality leads : 9/10. ” Yup.
When I was new at VentureCapital I was trying to figure out the business. As a VC you want to feel like you have “proprietary sources” of deal flow. We are judging how well you are coached on stage. They do this because they have amazing skills at writing business plans. What stage? What price?
I mostly talk about startups, technology & venturecapital. It’s amazing what mental coaching can do for a workout. “A And sometimes I need the focus on my form of “Coach Matt.” With no platform to really help me with “food coaching” I had to be this coach for myself. Free your mind. Free your body.
Every time I think to write a post about this I figure the most recent board meeting I’ve attended will think it’s about them so I don’t bother. So I’m going to write a series of board meetings posts unrelated to anybody or maybe an amalgamation of them all. This should take the least amount of time possible.
As many of you know I run a weekly webcast called This Week in VC that’s getting between 25-35,000 weekly views across ThisWeekIn.com, YouTube & mostly iTunes. Why did you raise VC from Polaris & how have they been to work with? Any takers in a trade for helping do some write-ups against whatever you want?
VC’s Want to Help! To understand what most VC’s want between board meetings I think it’s useful to start with a quote from Mark Solon ’s blog for which I’m in complete agreement (along with agreeing with his entire post, which was brave, honest and accurate ). Most VC’s want to help.
I plan to write about it early next year when we’re all through. As I’ve written about before, You’d Have to be a Big Baby to Complain about Being a VC. Think about it – most entrepreneurs who manage to raise seed money or venturecapital usually raise enough money for 12-18 months maximum.
When I was new at VentureCapital I was trying to figure out the business. As a VC you want to feel like you have “proprietary sources” of deal flow. There is one source I never liked and no early-stage VC should – investment bankers. They are venture bankers not investment bankers. What stage?
If you read this blog often you'll know that I'm a huge fan of First Round Capital. They have totally changed the way you run a VC firm, investing heavily in systems & events for their founders that are pushing the boundaries of the way our industry works. These speakers help coach CEO’s on important executive decisions.
Your goal should be to turn your VCs into extended members of your team to get real value from them. Understanding where your VC partner sits in their respective fund and where their fund is in the cycle of its investment lifecycle will help you understand your VCs behavior. He is very pleasant when he calls and writes.
And because as a VC or as a CEO or senior exec you get presented to all the time we’re extra sensitive to it. 25% of VCs are expressives, like you. They form the other 25% of VCS and senior executives. The golden rule for VC is to be prepared to give yourself 20 minutes to present. Most entrepreneurs are.
This applies to both founders and to VC’s that work with them. By the time of my second company MySQL was a much more robust solution and worked well when you had to read a lot of information but was less performant on “write&# activities. Again, I can’t imagine being a VC and NOT doing this. A quick example.
One of the interesting things about being a VC is that you often see companies in transition. If you’re an early investor like I am that often means writing the first $2-3 million check into a business that previously had either survived on fumes or on a $500,000 angel round. You’re the coach, mentor, cheerleader.
Even venture capitalists who sit on boards where they have significant investments often forget this point. They write in their investment documents that they will occupy a seat on the board for as long as they are invested in the company, thinking of this as a protection for their investment and tool for them to influence growth.
And yes, VC’s, too. Negotiate directly with your VC or acquirer with lawyers present in the room. VCs : VCs are often on your side and usually act in an ethical manner. You can sometimes leverage your VC in a “bad cop&# negotiation with a buyer. What might the VC do against your interest?
It is never as rewarding when you’re the coach (but coaching has many other benefits. On Losing in VC. I know I won’t win every deal I want to in VC. Write things down. We helped the write out their requirements for a system. Don’t get me wrong – I’m not a sore loser.
It is never as rewarding when you’re the coach (but coaching has many other benefits. On Losing in VC. I know I won’t win every deal I want to in VC. Write things down. We helped the write out their requirements for a system. Don’t get me wrong – I’m not a sore loser.
Even venture capitalists who sit on boards where they have significant investments often forget this point. They write into their investment documents that they will occupy a seat on the board for as long as they are invested in the company, thinking of this as a protection for their investment and tool for them to influence growth.
We’re a national venturecapital investment firm but with our roots firmly in Los Angeles. I’ve spent hours this week reading about the firing of the head coach and personnel manager of the football team I support – The Philadelphia Eagles. Many tech execs (and VCs) I know have “bunker mentality.”
As a VC I’m acutely that a “yes&# decision to support an entrepreneur can do just that, yet I only write 2-4 of them per year and maybe another 3-4 as an angel. You can also spend time with a newer startup helping them navigate the world of product management, venturecapital or team building.
It is never as rewarding when you’re the coach (but coaching has many other benefits ;-). We helped the write out their requirements for a system. You are most vulnerable right after it has been announced that you won (I will write a separate post on this). Write things down. This one was eye-opening.
You are writing about the essentials of business. I am planning right not to write a post about how startups often get SEO wrong. Sometimes we draft business plans and coach the entrepreneurs on their pitch, and sometimes we even help develop a business model. A few years ago “venturecapital” was a revenue model.
A trophy investor is a great coach and mentor, sometimes providing the only shoulder an entrepreneur can cry on during difficult times. The trophy angel investor typically participates in networks of other angel investors and venturecapital firms that are available for evaluation, feedback and syndication. Emotional maturity.
For me, it’s very much showcasing that angel investing is not just writing a check, it’s so much more. In addition to coaching and mentoring, I want to put them in the game of investing into startups. Also, the skill sets and expertise they can learn and experience as an entrepreneur. The numbers are low, but they are not zero.
Yesterday I wrote Part 1 of the series on the changes to the software industry over the past decade that has led to changes in the venturecapital industry itself. These trends have put pressure on traditional VCs. So VCs spent a couple of years experimenting with earlier-stage investing, which is OK. Funny, that.
THIRD TIME’S A CHARM: On Sunday we presented to a panel of judges consisting of entrepreneurs and a VC investor. There are countless of great individuals willing to help, coach, mentor and guide new companies and new entrepreneurs that vastly outnumber the ones who seek out to do damage. We are all part of the ecosystem after all.
My primary role was “chief psychologist&# and as I’ve learned over the past few years the same has been true as a VC. I finally got around to writing it having read Fred Wilson’s post about what a CEO does. As a VC you see the insides of companies rather than the companies positive spin on TechCrunch.
Something happened in the past 7 years in the startup and venturecapital world that I hadn’t experienced since the late 90’s — we all began praying to the God of Valuation. How might our next phase of the journey seem brighter, even with more uncertain days for startups and capital markets? What happened?
So part of playing an effective coach is helping the team to see the answer for themselves. We talk a lot about his schooling, his early jobs as a developer and then as a VC and we talk about his decision to spend winters in Los Angeles. Fred is generous with his time and advice and I hope has shaped a generation of VCs for the better.
But VC is like congress. In the original version of his post, Andy writes. “This essay is dedicated to the great VC’s on my board who I am lucky to work with: Sameer Gandhi from Accel, Jeremy Liew from Lightspeed, and Kirsten Green from Forerunner. . Their data looks at tech VCs. Because they know him or her.
I’ve tried over the years to write many times about the realism of the downsides of being an entrepreneur because there is a complete cognitive dissidence between what you read about yourself in the press and what you feel internally about where you’re at in the journey. Advisors / Coaches / Mentors. I was 31.
Or if you’re a VC raising from LPs you have to list all of your deals, your investment value, your carrying value, your multiples, your IRRs, TVPIs, DPIs, etc along with net cashflows plus your previous LPAs. So what does a VC do when he or she isn’t ready to say “no” or perhaps might like to talk with you in a year but not now?
This class of investor typically writes checks from $50,000 to $250,000. These firms will continue to finance the company without VC money required, and in return keep the capital structure simple for the life of the company. Then there is venturecapital. Accelerators.
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