Global Themes

On Globalization & Venture Capital

“So you want to be a Venture Capitalist?”

On a tube ride back home – after a long day of meetings agonizing over investment decisions – I was reminded of Stewart Alsop’s quote about some VCs being in the “god category”.

I had read the story before but had only a vague recollection of where it had appeared and what the conclusion was.

Yesterday, a diligent search on the web revealed this gem: “So You Want to be a Venture Capitalist?

You may have to register (free) to read the article in full but I would recommend it to everyone who is contemplating a career in this business – and to everyone who has spent more than a couple of years on the inside….

Some good quotes from the story:

The first one from one of NEA’s founding partners, Richard Kramlich, hinting at the selection criteria at his firm:
“Two-thirds of the partners who were at NEA in 1997 are no longer at the firm; the surviving third accounted for 85% of the firm’s profit”

John Doerr at Kleiner Perkins, “it takes probably six to eight years and you should be prepared for losses of about $20million…Of course, while we take risk, we work like hell to avoid crashes”…

And finally the “God quote” that was nagging me:
“I think I’ve done very well as a venture capitalist, but I’m not in the god category”, Mr Alsop said. He defines a venture god as someone who has made $100million to $500million on a single investment. His list of industry deities includes Mr Doerr, Mr Kramlich and Michael Moritz at Sequoia Capital…”

Sobering…

I don’t know how many such “gods” exist outside Silicon Valley…in Europe and in Asia…but I feel hugely privileged to work with one of them

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See also one of my earlier posts, “How to become a VC

November 23rd, 2006 Posted by | Venture Capital, Venture Capital in US, What VCs really do | 5 comments

5 Comments »

  1. I always though VCs had to be atheists.

    Comment by Farhan Lalji | November 24, 2006

  2. Shantanu, you may know already that Seth Levine has written about the VC side of the story of becoming one (http://sethlevine.typepad.com/vc_adventure/2005/05/how_to_become_a.html) and Guy Kawasaki addresses the entrepreneurial side of the VC business through a whole category (http://blog.guykawasaki.com/venture_capital/index.html) .

    As for Farhan Lalji’s comment: the note refers to VC’s themselves being gods. Gods do not have to justify their believer status, but the investee should determine his/ her own status as atheist or a believer before engaging with VC’s tagged under ‘God’.

    Per se, I feel that referring to the most successful investors as Gods might induce just that little bit of cringe inside them.. I am sure nobody human wishes to be referred to as God no matter what their achievements.

    Comment by Shefaly Yogendra | November 25, 2006

  3. Good point, Farhan!

    Shefaly, the link to Seth’s post (and my comments on that) is at the bottom of this post…And yes, Guy Kawasaki is just brilliant…

    Comment by Shantanu Bhagwat | November 26, 2006

  4. Shantanu, you and others have GOT to see this VCAT at Guy’s blog today:

    http://blog.guykawasaki.com/2006/11/the_venture_cap.html

    I have an interesting list given to me by a VC who has got out of the business now which I shall dig up and send you sometime soon.

    Comment by Shefaly Yogendra | November 29, 2006

  5. Shefaly,
    Thanks. Looked at it…I scored miserably 🙂
    Its provocative and funny but does not mention the one thing that dominates everything else… LUCK!
    BTW, John Doerr was young when he got in the business but I suspect Guy wanted to be provocative..which he has managed with great aplomb!
    More on this…hopefully soon

    Comment by Shantanu Bhagwat | November 29, 2006

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