Three Valuable Investing Tips: Why I am Transitioning from a VC to a Start Up

Investing is an incredible career, but it takes a particular type of professional experience to excel. My journey towards this realization began after my first year working for a small Venture Capital firm, when my manager gave me the responsibility of overseeing portfolio management. I had limited investing experience, and I set meetings with senior partners at our firm and other investors to better understand how to best approach my new responsibilities.

I learned a number of valuable lessons about investing during these conversations and additional time at the VC firm which eventually led me to look at other professional opportunities. Namely:

1) The best entrepreneurs want more than just money

When I met with a venture partner at our firm to discuss portfolio management, he told me his philosophy was that entrepreneurs should leave every interaction with an investor wanting more interactions. Entrepreneurs were happy to take the early stage capital, but the best ones also wanted strategic guidance from their investor. My next conversation was with a former partner at Kleiner Perkins who had worked with John Doerr, a legendary venture capitalist who was an investor in companies such as Amazon and Google. He told me whenever someone told John Doerr they wanted to be a venture capitalist, John Doerr would ask them why a top entrepreneur would want their money. The ex-Kleiner partner said John Doerr wasn’t just fastidious. The point was that successful investors need to bring something more to the table than just money.

2) You need more than an MBA to be a good investor

This wasn’t a huge surprise to me, but generally, the successful investors I spoke to didn’t have the highest opinions of newly minted MBAs. It wasn’t that these investors thought the program was a waste of money, but that the training wasn’t as useful as reviewing 1000+ business plans, seeing high quality companies fail, raising money, or working at a high growth start up. An MBA is a great starting point for investment professionals but can’t replace practical experience at a startup or investment firm.

3) It’s hard to be great at something if you’re not super passionate about it

Over the past three years, I’ve spoken to hundreds of existing and aspiring entrepreneurs. One of our key selection criteria at my VC firm is commitment, since we invest in companies and work with them over a long period. After a few conversations, it becomes fairly clear who is really passionate about what they are doing and is going to build a sustainable firm with or without our investment. After spending a week with an African entrepreneur who had been pursuing his dream of establishing a leading financial services firm in his country for almost a decade, I had to ask myself if I was as passionate about VC as he was about his business.

Because of these lessons, and my passion for the sustainable transport sector, I ultimately made the decision to transition from a VC firm to a startup. I hope this post is helpful for anyone considering either career!