Old Man Yells At Clouds (and Aspiring VCs As To What This Industry Really Is About)
I get a lot of inbound from friends, acquaintances and Twitter followers about making the transition from Operator to VC. Here are the top three reasons — lightly paraphrased — for why venture interests them:
- “I love working on products and it seems awesome to be able to work on 10 at one time instead of just one”
- “It seems intellectually stimulating, spending your days talking with the smartest people and investigating new technologies”
- “I enjoy helping entrepreneurs and could see myself doing that as a career”
I have never heard someone say “I want to be an investment manager and a salesperson” despite this being THE fundamental job responsibility of a venture capitalist. And I think that’s one reason why we’re seeing more boomerangs from Operating to Venture and then back to Operating (or changing VC firms). People didn’t actually realize what the job was going to be and didn’t like it or underperformed or realized they chose the wrong firm (in terms of culture, strategy, quality) from which to base their career.
Now, the way I personally approach this “investment manager and salesperson” responsibility is similar to the “I breathe to live, but I don’t live to breathe” mantra. Satya and I started Homebrew not because we wanted to optimize for investment management roles in our careers but because we believed practicing early stage venture in a deliberate manner would be the most satisfying and impactful way to spend the second half of our careers. These objectives do include variations on the intellectual stimulation, assisting entrepreneurs to succeed and so on that I hear espoused by aspiring fund managers. BUT we also had full understanding of, and embraced, the responsibilities that came with the role.
Thus far we’ve only proved to be good fund raisers and need to prove that we’re also good fund returners — what I’m trying to emphasize here is that you cannot shy away from the core value proposition of our business: you are taking money from others and returning it at a risk-adjusted multiple. This doesn’t mean LPs are your customers (I strong believe LPs are your partners and founders are your customers), but I want to emphasize that realities of venture capital don’t match the content marketing we do as an industry. Let me also emphasize that I believe the question of “founder friendly or not” is orthogonal from embracing the responsibilities of an investment manager. Venture is a long-term, repeatable game and, at least the way we practice it, I believe our interests, and values, are greatly aligned with early stage founders.
So if we’re friends and you still want to talk with me about “getting into venture,” I’m thrilled to have that discussion, but be prepared to tell me why you’re going to be an excellent investment manager and salesperson :)