Analyst/Associate: you really love this job. You get to talk to founders and peers all day, going to events and conferences, it's really very interesting. You feel all-powerful asking questions and judging people all day. You get calls from headhunters all the time, everybody wants to hire you (especially if you are a female). It gets a bit boring at times, and your partner keeps asking you to do some market analysis which you really hate. Also a principal took the credit for a deal you sourced, what an asshole, you're so much smarter than them anyway. You're thinking about whether you should try to join a startup? you have several startup ideas yourself but can't find the CTO. But it would be so fun to pitch your colleagues if you had a great idea, and be on the other side!!
Principal: oh shit. You used to spend your time writing fun tweets and hanging out with friends. But now the partners really expect you to find some good companies and CLOSE them. But nobody cares about your tweets... the founders you want to back don't return your emails and those you don't want to back keep emailing you and sending you Linkedin messages. The other principal has closed 4 deals already and you've only got one. Yes, you took credit from the analyst who sourced it, but come on, emailing a founder hardly qualifies as sourcing, who the fuck do they think they are? You get pissed that analysts and associates work way less than you, and you're still in the office reading DD materials when they've gone to a Forbes 30 under 30 dinner. Also those partners piss you off - they don't know shit and just got lucky, I could totally do their job if i had their title. And if I was a partner, those founders would definitely get back to me.
Partner. What? you're asking me to put $300k in the fund? You suddenly realize how VC works and that you're not going to make any money unless the fund performs. You start to think way harder about the investments you make. You've got a bunch of analysts and associates sourcing some good stuff for you, but they clearly don't work as hard as they should. But you can't yell at them, you lost 2 already to a competitor firm, and if you lose the only female in the team the diversity police is going to start tweeting at you and your firm. You wish you could ask the principal to help you out, but you suspect he doesn't respect you. That arrogant asshole hasn't even had an exit yet. You start to get really frustrated with the 55 year old founder of the firm who still wants to stick around and slows the firm, but he clearly is not going to let go. If you had your own fund, you would really do things differently...
Yes.
Do one for Corp Dev too at a startup or F100
+1 for corp dev
i want more of these
Super accurate
This is a good post but it bothers me that the author, out of all things, messed up the title. "Pick you life"... bruh lol
I honestly can't tell if that's part of the joke or not.
So how would you do things if you really did run your own vc firm?
I would do:
1. small team (3 investors, 1 usa, 1 europe, maybe one latam, could add 1 or 2 folks over time but 5 is the absolute max) because decisions slow down exponentially as you grow a team, and you get more politics / less skin in the game. F* politics.
2. no hierarchy, everybody equal partnership. Make decisions within 48 hours of the first call with the founder. F* red tape, f* ambiguity.
3. small fund (maybe $100m, could be less), small follower angel/seed tickets ($100k to $250k), very high-velocity deal making (100+ investments a year). Double down on winners once value-add demonstrated to founder (see point 5.). F* competing to lead rounds and fighting for ownership (I just want to allocate capital).
4. Tech-driven sourcing - playing probabilities and not stock picking (almost everybody is playing stock picking in the industry, the only difference with top funds is that they can actually 'buy' the stock). Large number of deals and data informs your investment strategy creating a virtuous circle and super high-value dataset. F* coaching demanding junior teams that tweet shit and are glorified call center people, and f* pretending I have a "vision" or understand a space better than a founder who has spent years in it.
5. High value add: build a large network advisors/operators who get % in the fund in exchange for dedicating a number of hours per year to portfolio cos. F* the zero value add VCs bring, I'll bring you access to what you need and let you get on with it. Large portfolio = observe and share best practices, centralize best service providers.
6. Create an unfair game. I'll share (some) of my data with the very best fund in the world in exchange for them letting me have a piece of some of their deals. F* begging top tier VCs to let me come in the round. Oh yeah - a bad list of assh*les VCs (and also a good list) to share across my 100s of portfolio cos to terminate some evil people in the industry.
Oh yeah and the culture...
- Just work from home or hawaii or anywhere that makes you happy (as long as you can cover your timezone and you don't blow up a travel budget)
- No internal meetings shall last more than 1 hour. There is nothing that requires more than an hour of talking if you're well prepared. Long meetings are hell.
- Meet once every 2 months, stay in really great places (family welcome) that everybody wants to go to so it doesn't feel like a f*g business trip, where all that cash we saved on office space will be spent on making this pleasant.
- The single purpose here is to make money and have fun while doing it. We're not going to pretend we are ending world hunger and saving the planet and do fake virtue signaling. But at the same time, I believe that we're doing good by (i) letting you live where you want and promote remote work to avoid useless commute and living local is definitely greener (ii) data-based investing removes bias and I think it will create a fairer place for everybody (iii) The only exception to what I invest in, will always be to avoid businesses that rely on spending $ to create bad habits and, once they are formed, jack up the prices [*I think superfast grocery delivery is pure evil*].
hmu when you start the fund and need bodies
Shit take IMO.
You just contradicted yourself when you brought up high velocity deal-making & advisors who dedicate time into port cos in the same context.
If you're doing 100+ investments with a small team then think about how many man-hours of advising that's required in total. This will end up in one of 3 scenarios - i) You'd spend all your time building out a network to that you spend no time actually analyzing deals, ii) You build a moderately sized but solid network but now the advisors have to spread their time so thinly per Port Co, iii) you were a little clever and decided to invest in batch of companies doing similar things to scale your advising practice but now you're creating a competitive dynamic amongst your companies and clearly you opened a floodgate of politics and bad culture. You may profit from valuations but you either poisoned any long term prospects for your port cos or installed a cut-throat culture that will backfire at some point either by imploding within or by creating a massive PR risk for your fund.
Congratulations you are now also another 0 value add VC that everyone hates.
this is amazing
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