In case you are wondering what I did on Valentine’s eve…
I was here…talking to a bunch of bright people and listening to some great ideas…
Could anything have been more exciting?!
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Belling the (V)CAT…
I scored as low as it could possibly get*…which set me thinking - is this the right test for becoming a VC? (I can hear Tut tuts!)
Actually, Is there any right “test” for determining whether a person is well-suited for a career in VC - or more importantly, will he/she succeed?
The test misses one important thing; unfortunately it cannot be measured…and unlike the experiences and skills one has, it is entirely unpredictable and may desert you when you need it most - I am thinking *LUCK* 
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* Yes, I know this is post-facto rationalisation, but…
I think I screwed up “Background” in a major way…missing on all the +5s and being saddled with two -5s (for my sins at LBS and Monitor) 
Note to Guy: Can I get a bonus +5 for “unusual” background? Radio DJ, Comp Engg, Mushroom farmer, Diplomat etc?
On “The Funded” and putting a mirror to one’s face*…
I was going to check out The Funded* today but discovered that Jason has beaten me to it!
The site does not have many European funds but does briefly mention London Seed Capital, Atlas and Index - sadly nothing on Amadeus.
I have nothing to add to what Jason has written except to re-emphasise the following (this is for entrepreneurs and start-ups):
If you’ve dealt with (and preferably received funds from) a VC, I would recommend you post your experience on The Funded.
As for me, I will try and see if we can get a nice entry for Amadeus
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P.S. Thanks to Barak for a great title and to Loken for the link (in response to my earlier post)
Entrepreneurs make really bad VCs
Ok…I admit that is an exaggeration…but one of the VC industry’s well-known article of faith is that good VCs must have some entrepreneurial experience in their past lives/careers… (see e.g. one of Guy Kawasaki’s best posts: “The Venture Capital Aptitude Test“. Update: pl. see comment below.
The main premise being of course that unless you have been an entrepreneur, you can never understand what it is to be on the other side of the table, you find it hard to empathise with management and you cannot really add value.
Is this really true? While empirical evidence may suggest a strong correlation, it would be wrong to infer a causal relationship based on that.
Why do I say that? Look at John Doerr, arguably one of the most successful VCs in silicon valley (or anywhere else for that matter)…and look at Mike Moritz (a former journalist with TIME magazine)…On the other hand, I know there is Vinod Khosla…
But that’s really not my point…
Fundamentally, VCs and entrepreneurs are on the opposite sides of the spectrum…while VCs need to act from the “buy” side: cautious/ paranoid/ careful…entrepreneurs would usually be on the sell side: exuberant, wildly optimistic, believing that anything is possible, in a hurry…
So to a certain extent, whether you will be a good VC or a good entrepreneur is “hard-wired”…and it is difficult to be both…
No wonder then that great entrepreneurs rarely make good VCs and great VCs rarely make successful entrepreneurs…
Exceptions? I am sure there are some…Vinod Khosla for instance and of course, Hermann Hauser…but not a large list, I guess…
Right…or wrong?
See also:
Will Price’s comment on this topic and an interview with Larry Sullivan which talks about this but is also very readable - on its own - as it recounts his experiences of managing a global start-up (that got incorporated in 3 countries within 3 weeks!)
Find of the Day: This interview with John Doerr (from 1997) with some timeless advice for entrepreneurs (and VCs); also here.
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P.S. Over the coming weekend, I have promised myself to take the VCAT and am contemplating posting the results online (suicidal?)… watch this space.
Missed opportunities, sour grapes…
A few days ago, I did my good deed* of the day by introducing a start-up to a potential customer of theirs.
Nothing unusual about it except that the start-up was not one of our portfolio companies (and neither was I a shareholder or a beneficiary in them).
I am not usually this altruistic :-) … but this was a special company.
I was first introduced to them more than three years ago…and at one point we came very close to doing a “deal”. Although we ended up walking away (for reasons of valuation and some other concerns), I continue to remain excited by the opportunity that their technology offers and I am reasonably confident that - with a little bit of fair wind - this could be a great European success story…
Now - as I said before - we actually ended up not doing the deal…so on the face of it, there is little reason to stay engaged and even less to actively help them.
In the larger scheme of things though:
- The world is a small place (and the VC community even more so)
- Life is too short to complain about sour grapes and
- What goes around, does come around (including good deeds and great ideas)…
So nurture your relationships carefully - good friends and great entrepreneurs are hard to find (and harder to maintain).
For more on good deeds (or good turns, to be precise) read this. I was a Boy Scout once - old habits die hard!
* Scout logo courtesy: http://pinetreeweb.com/wosm-india.jpg
A VC for a day…
Or more accurately - how does it feel to be “A VC for a Day”?
I spent a good part of Friday and Saturday last weekend at LBS’ annual Venture Capital Invetsment Competition.
The VCIC is one of the most innovative opportunities for MBA students to get aquainted with Venture Capital that I know of…
It began in 1998 and has survived the tech bubble and the dot-com burst. This year, it is expected to include 40 events across the world.
So what makes it unique?
“At the core of the event is a creative turn of the tables. Unlike business plan competitions in which students pitch their own ideas to investors, at VCIC the students are the investors, and real entrepreneurs pitch to them. It is a very powerful learning experience for both parties. Add to the mix a dozen VC judges, and you have what the VCIC website describes as a “win-win-win.” Students learn (and win cash), entrepreneurs connect with investors and VCs get an early peek at some viable deals.”
Sounds too good to be true? well, last year, a third of the entrepreneurs participating in the programme went on to raise $30M in venture capital! The average hit rate is now close to 20% and on the way up.
Upside? Some interesting deals for participating VCs, networking - of course, and a few hours of interaction with some very smart people (on both sides of the table - entrepreneurs as well as students).
Not surprisingly, quite a few competitors (students) end up at VC firms…Six VCIC alumni have gone on to participate in the prestigious Kauffman Fellows Program and there are many others in various VC firms (including Bill Earner who joined us last year).
As before, I thoroughly enjoyed the sessions and heard some really interesting ideas…including one for aero sports and another for mobile ticketing…I would definitely encourage MBA students (both, current and prospective) to find out more here.
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