The fantasy and the exit
For the longest time I have harbored the desire — okay, fantasy — of getting involved in the venture capital (VC) sector, but despite my strong desire and repeated efforts over quite a few years (decades) I’ve achieved no traction whatsoever, not even the slightest bit, so I’ve concluded that it’s finally time for me to throw in the towel and move on — my exit.
In this paper I detail my background, abilities and lack of abilities, skills and lack of skills, experience and lack of experience, and my (failed) attempts to get involved in the VC sector, not so much as a front-line (and headline) venture capitalist, but at least some supporting role in the business of providing venture funding for (primarily tech) startup companies.
To be clear, I never made it into the VC business, not even making it through the front door.
My main purpose with this paper is to simply close out this particular chapter of my life — and then to move on. If anybody else can learn any lessons from my experiences, so much the better.
No traction, no progress
The real bottom line is that despite my best efforts, nobody has ever said to me:
- “Wow, you should become a VC!”
- “Wow, you’d be a great VC, you should come work with us!”
In fact, I’ve never even gotten to the stage where anybody has said that I show some potential as a VC and that I just have to do a little more work on a few things and progress will become a reality.
I mean, other than my own interest in my own head, nobody anywhere has ever thought that I might have potential as a VC, even after I have directly expressed such an interest.
My background — hard-core technical
My background is hard-core technical, primarily as a software developer. Some applications work, but mostly at the systems level. Designing and implementing compilers and programming languages , graphics systems, microcode, working with hardware engineers, designing instruction sets, databases, CAD systems, software tools, and search engines. Stuff like that. The kinds of technology that you simply can’t explain to most people who don’t have a comparable technical background.
Experience with VCs and startups
I’ve worked with quite a few VC-funded tech startups over the years (decades!) and chatted informally with quite a few VCs along the way as well, but that hasn’t led to any amount of traction.
In fact, from 2001 through 2006 I even attended a number of venture capital conferences, the VentureOne eXchange series, in Boston and San Francisco. I attended a couple of Dow Jones Private Equity conferences in NYC as well. I met a lot of VCs and entrepreneurs. I attended as media — I had an online investment column.
What I Learned from Venture Capitalists
I’ve already posted a paper on Medium that details much of what I think I learned from working with startups and their venture capitalists — What I Learned from Venture Capitalists.
Why did I ever want to be a VC?
After working a lot of years (decades!) as a technical contributor, I just got tired of coding, design, implementation, testing, management, you name it.
Thinking about my abilities and interests, I realized that:
- I’m a novelty junkie — I like to have a relatively brief foray into an area and then move on to the next new idea.
- I like bouncing around between projects.
- Desire to be involved in multiple ventures, the more the better.
- I’m a problem solver.
- I like pondering strategy.
- I like working with ideas, the newer and fresher the better.
- I like staying out of and above the details of implementation and execution.
- I like seeing new ideas turned into reality.
- I like staying out of management madness and office politics.
Hmmm… where do making (lots of) money, creating value (for society), and creating jobs fit into my picture? Ah… I knew there was something missing.
What has prevented me from becoming a VC?
Okay, so I’ve wanted to be a VC, but what has prevented me from doing so? That’s what the bulk of this paper will be about, but the summary list is as follows:
- Technical rather than business background
- Weak people skills
- Weak sales skills
- Weak persuasion skills
- No significant operating experience
- No finance background
- No natural, intuitive sense of marketing
- No solid track record as an entrepreneur
What are the requirements for being a decent VC?
Maybe I wasn’t paying close enough attention so many years ago to what the requirements are for being a great, decent, or even an average or even mediocre VC. Interestingly enough, I’ve actually never seen a list of requirements per se, which seems a bit odd. The rest of this paper will certainly cover a lot of the areas of expertise that I am aware of, but they do include an interest and/or expertise in:
- Finance and capital markets
- Business planning
- Business operational experience
- Management experience
- Executive staffing
- Strategic planning
- Marketing, market positioning
- Sales, sales planning, selling
- Understanding technology, at least at a high level
- Understanding technology trends, at least at a high level
- Multi-tasking, involved in a range of ventures
- Competitive analysis
- Problem solving
- Persuasive skills, good/great storyteller
- Great people skills, including building and managing teams
- Raising capital from limited partners
- Managing relationships with limited partners
- Planning exits for portfolio companies
- Promoting the firm, building its brand
- Being a team player within the firm
- Preparing and reviewing funding and term sheets for potential portfolio investments
- Preparing papers and reports on investment potential in market sectors
That’s not meant to be a comprehensive list, but at least a start.
If that were a list of minimum requirements then I definitely would be out of luck, but that would also explain my current state of affairs. I always imagined that some amount of expertise in some of those areas coupled with a strong interest in the other areas would be sufficient to at least get me in the door, even if a lack of deeper comprehensive experience and aptitude blocked a rise to the upper tiers of the VC world. It was never my expectation to aspire to the top tiers as a front-line VC, but simply to participate in the VC sector in some capacity other than my current role as a complete outsider and mere, grunt, technical contributor.
All of that said, I am intrigued by the challenge of coming up with minimalist checklist of what the starting point is to even get in the door for a VC position. In short, the checklist I wished I had had in hand 25 years ago that would have given me an instantly clear signal that pursuing a position in the VC world was simply not in my cards no matter how I played them.
Technical focus vs. management and sales
With my technical focus I’ve shied away from both management and sales. Double ouch. I mean, that’s great for a technical resume but not so good from a VC perspective. I’ve also shied away from finance and numbers in general (revenue, cost, profit, margins.) Triple ouch from a VC perspective now.
Weak sales skills
It’s kind of hard for someone like me to excel at sales and selling when they have such a strong disinterest in selling. I don’t have any demonstrated (strong) aptitude for selling. In a pinch, maybe I can do a little selling, but it’s not my preference, not my strong suite, and certainly doesn’t come natural.
I’ve always been unable to explain details is a salesy way that grabs attention and compels the listener to buy what I am selling.
I typically focus too much on technical merit and focus too little on the listener’s perception of benefits.
It’s not just that I lack skills that might be learned through training and experience, but that I just don’t have the basic aptitude and ability on which to layer learned skills.
Venture capital may have a passionate relationship with technological ventures, which is a very good thing for technical me, but first and foremost it is still all about the numbers — namely, earning a very handsome return on invested capital. I respect that, I really do, but I also have to confess to having a fairly dramatic disinterest in the details of finance.
I admit it: I have no passion for term sheets.
I admit it: I have no passion for detailed financial analysis.
It’s true: I have no finance background.
Yes, it is true that I do have a strong interest in finance in the sense of macroeconomics, global economics, and capital markets, including the stock market, and I do actually care at least a little about generating revenue, pricing, profit margins, cost control, and even bottom-line profits, but a lot of that is acquired knowledge rather than being a fundamental, natural, and intuitive part of my being.
Systems guy, not applications
My background is very technical, primarily as a high-end software developer, mostly doing more systems -oriented work and some high-end applications work as well. I’m certainly not your typical applications developer. That’s great work and a real technical challenge, but not very helpful when the primary role of a VC is to judge markets and applications-level products and services. Sure, there’s an interest in developer tools as a startup area now, but most of even that is a fair bit less sophisticated than my traditional level of expertise.
In other words, my skills and experience are far less than optimal for VC work.
So-so entrepreneurial skills
I have tried my hand at entrepreneurial efforts, but to very, very limited success — hardly anything worthy of being considered a track record that would interest a VC. But it at least indicates an interest and desire on my part.
For example, back in the early 1990’s I developed and marketed an object-oriented programming language and class library for Windows software development. I was actually out there selling it, advertising it, pitching it at trade shows, talking with the press, taking orders, and shipping product. The real deal. Granted, I didn’t make a lot of money and the business petered out despite my best efforts, but I really did think of myself as an entrepreneur, a Software Entrepreneur. I had a follow-on product, but it had even less success. I had some additional ideas, especially focused on Software Agents, but I was never able to focus all of that mental energy into a viable business.
The bottom line is that I don’t have a solid track record of great success on the entrepreneurial front.
Weak people skills
My career focus has been on technology, not people.
For quite some time I imagined that I wanted to move into management. I was even a project leader for a few projects and a technical manager for a brief stint, but at the end of the day I just didn’t have anything resembling a strong affinity for “personnel management” — motivating people, conflict management, team-building, etc.
I’ve always known that I’m no superstar when it comes to communications skills, but I have indeed been good enough at writing and talking to both get by and to thrive reasonably well. Still, I think I’d have to give myself more of a B- on the communications skills front, and maybe only a B+ on my better days, while being a great VC probably requires solid A-level communications skills, if not an outright A+. Paradoxically, technical positions have traditionally been reasonably tolerant of people with my so-so level of communications skills, and even rewarded and praised B- communications performance for those with higher technical skill, but that easy ride on the technical front has worked against me on the non-technical front.
When I was younger I never really recognized persuasion as a pursuit of any real value — it always smacked of sales and politics rather than true reason. I was always offended if someone did not accept an argument that was firmly rooted in reason and technical merit. Sure, in hindsight, I can see that I missed out in a lot of opportunities because of that shortsightedness on my part, but I achieved enough success when arguing strictly from merit and reason that nobody could complain.
But as time passed by and my interests expanded, it became more clear that a lot of the kind of opportunities I was interested in were not to be won strictly with hard-logic and solid facts.
I was fine when marshaling of facts and logic were all that was required, but increasingly often that simply was not enough to persuade people for the kinds of things I was becoming more interested in.
Leadership and building teams
I’ve always been proud of my ability to organize my thinking, but I’ve mostly avoided organizing people and building and leading teams. Leadership and team building are essential for creating and running new ventures. What I haven’t focused enough energy on over the years is the skills that a VC needs for recognizing the leadership and teambuilding aspects of VC investments. A startup may have a great plan, but the question is whether they possess the leadership and teambuilding potential to achieve great success. More importantly, what would I bring to the table in this area. Uh… next question, please.
What is my emotional IQ?
Facts and logic and reason are everything to me. They carried my through a lot of difficult times. But they also limited my potential. Soft skills are needed. Sure, intellectually I recognize now what emotional intelligence is all about, but it’s not a natural talent for me. I’m certainly incrementally better at it now than even a few years ago (very few), but that increment of improvement doesn’t really move the needle in terms of real potential.
I do in fact make a conscious effort to fathom what the non-rational objections might be in each critical situation. Of course, it being a conscious effort rather than a smooth, automatic, natural, intuitive skill leaves me at a very distinct disadvantage.
Reading people and liars
Comprehending beliefs, desires, and intentions is an urgent need for all but the most technical roles. Judging whether there is a discrepancy between words or actions and beliefs, desires, and intentions is equally critical, the extreme case being the individual (or even an entire organization) who is lying. Granted, it may only be a little white lie, a modest misspoken word, or excusable mistake, but nonetheless it remains urgent to be able to distinguish between the impression given and the underlying reality.
Alas, I’ve never been very good at reading people, and unlikely to be able to detect all but the most obvious and egregious of lies. Sure, I’m fine when it comes to observable facts, where discrepancies between words and facts can be ferreted out using logic and analytical skills, but human intentions are another matter.
It is especially important that a VC be able to reliably read people since there is real money at stake and the world is so full of charlatans in pursuit of it, the truth be damned.
Sure, VCs have techniques and processes, such as due diligence, background checks, reference checks, and other tests that have a decent chance of ferreting out the charlatans before they cause any real harm, but the front line and final defense remains just a gut-level ability to read a person and sense that something is off.
In my case, I have my technical sense, and so much of the fraud in the tech sector is simply bogus technical claims, so I am at an advantage on that front. So, lie all you want and make up all manner of outrageous and inspiring stories, but if the technical claims don’t hold up to my hard-core technical scrutiny you will be out of luck regardless of your non-technical persuasive abilities. But… lying, exaggeration, and misrepresentation are so common that reading people is just as critical if not a more critical skill.
Intolerance of ambiguity
I’ve dedicated my professional focus to an extreme intolerance of ambiguity — wherever and whenever ambiguity rears its ugly head, I’m always there to annihilate it. I have absolutely zero tolerance for ambiguity. Ambiguity has been an endless source of problems both in the technology sector and society as a whole. Sure, there is plenty of room for subjectivity and uncertainty, but there is absolutely no excuse for ambiguity. Alas, I’m afraid that my view is in the distinct minority. Worse, a lot of people absolutely revel and wallow in ambiguity and see it as a source of opportunity and pride rather than an ugly problem to be resolved as quickly as possible.
Sales and persuasion are two particular areas where individuals — and even entire organizations — have exploited ambiguity for short-term gain at the expense of longer-term disappointment if not outright harm. The polite term might be to say that they are innocently misleading people or that people don’t really know exactly what they want, so there is no harm in giving them something that maybe they might want if they gave it a chance, but my strong (extreme) preference remains finding out what people really want and really need and then addressing the separate issue of whether I have anything substantial to offer them that actually does directly address their desires and needs.
Needless to say, success in VC demands a significant level of tolerance of ambiguity. Your portfolio companies may give you great periodic reports and positions on their boards gives deeper insight, but there is a lot that must be taken for granted and on faith, with very little time, energy, or resources available to continuously drill down to bare facts and verifiable truth for every single matter that is key to the success of the individual businesses. Granted KPIs (Key Performance Indicators) are really important, but they are also really hard and either not available or too dubious to be true measures of guaranteed success.
Focus on monetization — good thing or bad thing?
I thought that we had put the whole dot-com “don’t worry about monetization” thing behind us, but I have repeatedly been proven wrong even in very recent years. The mantra is “go for users first, then worry about how to monetize them later, much later.” Granted, I’m a technology guy, so getting the technology right is always a big concern and (a) primary focus for me, but even I recognize that revenue, margins, and net profit are absolutely essential to building a long-term sustainable commercial enterprise. But, these days, that’s a distinct minority view, at least when judging new ventures in their earliest stages. As a result, that would leave me at a distinct extreme disadvantage in today’s VC community.
No instinctive marketing intuition
I think my failure to succeed (wildly) on the entrepreneurial front lies primarily in my lack of skill at understanding marketing at a more visceral, instinctive level. I mean, I understand marketing at an intellectual level and have proven that I can go through the motions, but having a gut-level feel for the pulse of a market is something that has eluded me. Even when I was marketing a tool for fellow software developers I still didn’t have my finger firmly on the pulse of that market. Double ouch, again.
I’ve been unable to “see” market reality as if it was an image right in front of my face. Sure, I can imagine anything, but to synchronize an imagined vision with reality is or has seemed to be… beyond me.
Excel as a freelance consultant
Primarily I have focused on being a freelance software consultant. I’m not an employee-type, focused on position, power, authority, budget, benefits, vacations, raises, perks, etc. So, I do certainly have a strong sense of independence, coupled with a distinct lack of need for a structured work environment that employee-types need to thrive.
I’m not much of a team player either. Sure, I can work with a team, but it’s not my natural and strong suite.
I have visited the web sites of countless VC firms, dissecting their team descriptions and open job descriptions, and it always seems that they see themselves as a team, working closely together, which doesn’t bode well for me.
If I had been a successful serial entrepreneur, then VC firms might tolerate me on a consulting basis, but… I’m not.
Front-line VC vs. advisory consultant
I’ve never imagined that I would ever be a big-deal, front-line venture capitalist, but rather more of an advisory consulting type. I actually did do a couple of technical due diligence projects for a VC a number of years ago, but I also never imagined that doing only technical due diligence would ever keep me very happy for very long. My aim really has been to be somewhere in the middle, evaluating the strategy and technology of startups.
That’s it, my first choice has been my desire to work as an advisory consultant, spending a little time with a lot of firms.
What’s the right VC position for me?
Honestly, I can’t recall ever actually seeing a VC opening or opportunity that felt right for me. I’m not a front-line VC and not a back-room analyst either. As I have already indicated, I’m more of an advisory consultant, but I’ve never seen such an opening at a VC firm.
What would I do at a VC firm?
The honest truth is that I don’t have a solid conception of specifically what I would do at a VC firm, and never did. All I ever knew was that I wanted to do something, anything, that would allow me to be directly involved in the evaluation, funding, strategy, operation, and supervision of startup companies, from the VC side of the fence rather than getting sucked down in the muck of the actual day to day operations of a typical startup.
In terms of slam-dunk ability, I could definitely do technical due diligence.
Due diligence for VC firms
I actually did do a couple of due diligence projects for a bonafide big-deal VC firm years (decades!) ago. I had worked at one of their portfolio companies and left to become a freelance consultant. They did say they liked my work, thanked me for it, and even paid me, but… there were no follow-on projects, so maybe they were just being polite (really, a VC firm being polite?!!).
Whatever. In truth, although technically I could still do technical due diligence, I don’t really have a strong interest in doing that as my main thing. I see myself as more of a bigger-picture guy, more interested in vision, strategy, and architecture. Still, I wouldn’t mind doing a little of it on the side, as a minor thing, just not my main thing. Even so, the line of VCs outside my door clamoring for me to do technical due diligence for them is… empty… completely empty.
Shouldn’t I simply create my own position?
Basic logic would suggest that even if it is true that even if there is no existing position with an empty org chart box waiting for me at existing VC firms, that doesn’t mean I can’t create my own position and then proceed to persuade some more open-minded VC firm to make room for me. Oh, yeah, I forgot — my weak sales skills and lack of skills for persuasion kind of limit my potential on that score.
Never met an org chart box I fit into
Seriously, never even once in my long career have I ever encountered an org chart box that made me feel comfortable. I’ve always been too interested in doing more than one thing to fit into one box, not to mention fitting into one box for an extended period of time. Freelance consulting was always a better fit for me.
Even if I had the opportunity to define my own box, that wouldn’t work either. It’s simply the nature of a closed box that is incompatible with my basic personality.
An idea guy at heart
I love working with ideas. Concepts, visions, strategies, approaches — these are what I live for. On the one hand this does make me more suited for a VC position than in an operating position at a company, but…
Not so interested in implementation and execution
The core of any startup is taking an idea from conception to market. Technically, I have a lot of skill with specification, architecture, design, implementation, and execution in general, but… I’m really more of an idea guy at heart. Sure, I’ve gotten paid for implementation and execution, my main source of income for my career in fact, but it is working with ideas and concepts that is my real passion. Implementation and execution are just uninteresting grunt work for me, nothing that I am passionate about. Another double ouch — VCs seriously need people ready and able and extremely passionate to move away from the conceptual and idea stage as rapidly as possibly and they super-seriously need people who are rabidly passionate about execution, getting products and services to market and growing the market as rapidly and profitably as possible. Sure, I accept the latter as a given and mandatory requirement, but my passion is primarily for the former. Sigh. And ouch.
Actually, I do have a lot of passion for implementation — negative passion, negative infinity in fact. Another ouch on the VC front.
I am seriously interested in seeing ideas move from concept to implementation, but more as an advisory consultant on the implementation than a hands-on doer. Grasping implications of concepts need as much attention as actual implementation, and I excel at the former, where few people do, and have little interest in the latter, where most people excel.
One area of implementation that I have excelled at is grasping the consequences of complexity — the testing, documentation, bug potential, performance, capacity, flexibility, adaptability, and maintenance headaches that come with greater product complexity. Unfortunately, many (most?) managers and executives see that “insight” as more of a negative than as a positive — they want people who move faster today regardless of any downstream consequences. Getting the last laugh, a lot of the freelance consulting work I have gotten over the years has been to correct for misjudged complexity, to rework software that was more complex than needed or too complex for the original development team.
Implementation is essential to entrepreneurial success, but to me personally it is a secondary concern rather than my primary concern for the conceptual stage.
Again, I am passionate about ideas, concepts, and truth. I’m personally much more interested in finding the truth of a matter than in telling a good story, while most people focus on and passionately prefer the latter.
Jack of all trades — master Of none
On the plus side, I would think that a strong interest in many things and a strong desire to learn a little about a lot would be a fantastic skill for a VC, but… if the consequence is that I am not a true expert in any area, that severely limits my value to any VC firm which has a need to consult with the extreme experts in any area for their investments. Calculate X times zero — it doesn’t matter how big X is, the result is still nothing.
I’m interested in everything but passionate about nothing
I really am interested in, well, just about everything, but when it comes to passion, which is everything when it comes to success, I simply don’t have anything to offer. Yes, I’m very interested in passion, from an intellectual perspective, but interest does not equal or replace the need for true passion.
Footnote: Well, I’m actually not interested in everything everything… back in the days when I used to read the Sunday New York Times I always instantly discarded the advertising supplements and the Fashion, Entertainment, Sports, Automotive, Arts, Style, and Real Estate sections.
I had hoped that my general interest is many things would have been a valuable attribute in the venture capital business, but the simple fact is that passion and some degree of specialization are much more urgent.
What is my special sauce, my value proposition?
What exactly is it that is so special about me that VC firms should be beating down my door and begging me to come work with them? Good question. My lack of a good answer is a little bit of a problem.
The closest I have to a value proposition is:
- Tech background.
- Worked at and with tech startups.
- Worked (a little) with VCs.
- Very interested in VC.
- Moderate knowledge of the VC business.
- Have at least tried to start a business of my own.
I’ve always thought of myself as a problem solver, but primarily to me that has meant a focus on discovering the solution rather than any significant interest in implementing that solution. Yes, I do enjoy participating in the journey of implementing the solution, but more as an advisor, even as others are doing the actual implementation work.
Interested in multiple ventures
A long-term commitment to a single venture is just not my thing. I’m much more interested in having my fingers in multiple pies, both at the same time as well as bouncing around between them. I would have thought that this would make me an ideal fit for being a VC, and maybe to some extent it does, but clearly it is not sufficient.
I personally find that switching between projects or ventures is both much more personally satisfying and is much more productive for me. So often, I run into minor obstacles in one project and switching to another project gives my mind a chance to ponder potential solutions while focusing on the other project, so that when I so switch back to the original project I am both refreshed and have a fresh perspective and possibly even new solutions to try.
Introverted vs. extroverted and outgoing
I think most VCs are either extremely extroverted or at least moderately so. I’m not extremely introverted, but certainly at least moderately so. Meeting people and connecting with strangers is something that I intellectually recognize as a necessity and make an effort to do, but it certainly neither feels natural nor comes naturally to me. Not exactly a strong card in the VC game (or most games in life.)
Bandwidth to be a great VC
How much bandwidth (raw energy) do I really have? I’ve always thought I’ve had a lot, but the reality is that it’s very relative. In any case, I no longer labor under the belief that I personally have the bandwidth and raw energy (and passion) needed to be a great VC.
What does it take to be a great VC?
What’s a great VC vs. a merely good VC vs. a mediocre VC vs. a barely acceptable VC? Sure, it’s about great exits and a great return on capital, building great teams, creating value, opening new markets, etc., but it’s all kind of moot for me. It was never my aspiration to be a great VC, but simply to be at least peripherally involved with the whole venture capital process. Maybe that’s my fatal flaw, that I didn’t aim high enough.
Wear a suit?
What? Me wear a suit?! Sorry, but no way. Sure, I technically could, but that would be so not me. I wouldn’t be… authentic.
I think the irony is that quite a few VCs are guys who look like they would feel a lot more comfortable in suits but dress casual in an attempt to appeal to the dress-down mentality of a lot of the newer and younger and trendier technology companies these days. The jacket without a tie thing seems popular these days as well. Either way, it’s not really me, even by a longshot.
VC firms really like having people who have some serious operating experience under their belt. After all, that’s the main thing that so many fresh, young entrepreneurs are missing and desperately need to drive upwards on the growth curve. Me? Oh well, next question.
Venture Capital is a numbers game — nobody can pick only home run plays, so the name of the game is generating a healthy flow of deals so that the numbers work in your favor. Where do all these deals come from? More importantly, how do I contribute positively to deal flow, because otherwise I am a drag, a dead weight, which is not usually considered a good thing in any enterprise, but especially in the VC world. Yeah, I intellectually recognize that VC deal flow is super-important, but I just don’t have the aptitude for making it happen.
Networking is everything in the VC world. It’s critical for fundraising. It’s critical for deal flow. It’s critical for syndication investment from other firms. It’s critical for staffing key positions in portfolio companies. It’s critical for closing early major business deals for portfolio companies to get them on the map. Me? Sure, I have over 500 LinkedIn connections, but these days that is more of a joke than a true feather in one’s cap. Yes, I know the value of networking and I expend a significant amount of energy networking, but this is probably another one of those areas where I do have an interest but it doesn’t rise to the level of a true passion. Put simply, a decent VC needs a great network. That doesn’t mean they have 20,000 LinkedIn connections, but that they do have a critical mass of The Right People on speed dial. Me? I’ve met a few of the right people over the years, but never managed to cultivate a truly thriving relationship with any of them. Sure, maybe a few know my name and will politely say hello and even answer my questions, but none of whom is likely to contact me… for anything, least of all to get involved in anything resembling a venture deal.
There’s absolutely no question that a VC must be nothing if not supremely confident. They must exude confidence. Even when saying No to a deal, they must do so with great confidence, no second thoughts allowed. They need great confidence to inspire limited partners to invest in the firm’s funds. They need breathtaking confidence to inspire the entrepreneurs of their portfolio companies. They need true confidence to inspire the faith of their colleagues at their venture capital firm. Me? Uhhh… sometimes I have confidence… and sometimes not so much. To be charitable, my confidence has always been more than a bit uneven. Maybe I’m just a bit too willing to acknowledge that there is some uncertainty. But that may be the true measure of true confidence — being confident in the face of even extreme uncertainty.
I do have a fair degree of confidence in my technical skills, subject to the caveat of being a jack of all trades but master of none, and I do have a decent intellectual comprehension of business and marketing, but I’m clearly not so confident when it comes to soft people skills and an intuitive grasp of marketing.
Coping with conflict
One of the biggest mistakes I’ve made in my life has been a bias towards avoiding conflict, like the plague. In reality, conflict is where all the action is, where the real money is to be made. Reveling in and thriving in conflict is what it takes to achieve big and great success. I do realize that now, and I do make a conscious effort not to shy away from conflict, but… it’s still not the most natural thing for me, and… it’s kind of late in the game to make much of a difference.
Authenticity is everything
You have to be who you really are. If being myself wasn’t good enough to get me into the ranks of the VC world, so it goes. If you try too hard to be somebody you’re not, most of the time you will fail miserably. And if you do succeed at being somebody you’re not, then you’ll be really unhappy. Stick with authenticity. It’s a lot less effort and people tend to appreciate it a lot more.
Personality and fit
Even if you actually do have all of the requisite qualifications and are fully capable of doing the job, there is still the question of your personality and whether you would be a fit for the team. I do think it is rare that a firm would actually come out and say that personality and fit were the issues, but I suspect that there may be some of that going on with my own personality.
With the right team, I do believe I could be a reasonable fit, but in truth, I actually don’t fit in with a lot of traditional teams. All I can say with certainty is that I never ran across a team that I really felt was a great fit. As a consultant I’ve always had the model that I need to adapt and fit into the client’s team regardless of whether I actually felt there was a genuine fit or not.
Teams have their own collective personality and regardless of all of the technical skills and technical activities of the team there is a behavioral aspect to the team that transcends the technical details of the business mission and traditional business ethics. There is nothing wrong with this, but to succeed on a grand scale you have to be fairly in sync with the collective personality and culture of the team. I refer to this as the animal spirits of the team, not intending any negative connotation, but simply highlighting that raw technical competence is not sufficient to get the job done.
Being in the right place at the right time
Nothing is as successful and satisfying as being in the right place at the right time. Getting there is another matter. On the VC front, either I’ve never been in the right place or never been there at the right time. Timing is everything, but not something that I’ve ever been very adept at.
I’m a firm believer in the value and power of serendipitous encounters. Unfortunately, they are neither guaranteed to occur nor can they be willfully engineered. Sure, you can definitely make a conscious effort to continually throw yourself into new and novel situations on the off-chance that new and novel will spontaneously combine to form the magical serendipity, but it takes a level of willpower, discipline, commitment and raw energy that I frequently just don’t commonly muster. Although, in my case, I think my bigger problem may have been my inability to recognize critical opportunities even when they were staring me in the face. In other words, the need to seize and capitalize on serendipitous opportunities.
I’m a novelty junkie
I’ve never been formally diagnosed as having ADD/ADHD, but I do enjoy bouncing around between projects (and companies) and I’m simply not interested in prolonged commitment to a single venture or project.
The wisdom of Groucho Marx
Groucho joked that he wouldn’t want to be a member of any club that wanted him as a member. I guess that’s the way I feel about venture capital right now — it’s a great aspiration, but if I did manage to make it in the door I would probably be terribly disappointed.
The Wisdom of George Carlin
I feel like the dog in an old George Carlin joke — he asked why dogs chase after cars, challenging what exactly dogs might be thinking they were going to do with the cars if they ever caught them. Again, being a VC is a great aspiration, but what would the reality be if I ever got there?
Intense focus and discipline can be quite valuable when making specific technical contributions, but a narrow mindset can be absolutely crippling when a soft, open focus is needed to see the big picture and potential for new and fresh ideas that break the mold (of the pre-existing mindset.) I’ve always thought I was good at avoiding and transcending mindsets, but now I’m not so sure.
I don’t think I had even heard of the term lateral thinking before a couple of years ago. Maybe that explains my lack of success on the VC front. Or, if I actually do understand the term now, it simply means that I should have always been looking for something besides/beyond a traditional VC position at a traditional VC firm.
A great place to visit, but who’d want to live there?
Even now I will gleefully drop whatever I’m doing just to do listen to yet another VC speak, but… I still can’t offer any sensible justification for believing that being a VC would work out for me personally.
Would I actually want to be around VCs 24/7? Not likely. Maybe it’s just that there would be way too much of a sales, persuasion, and cajoling component for my taste. I mean, I see sales as a necessary evil rather than a reason for my existence.
Hmmm… interesting thought experiment: Exactly how many hours a day would I find thoroughly satisfying to be immersed in the VC culture? Two? That would be easy. Four? Probably a slam-dunk. Six? Uhhhh… that’s probably pushing it. Twelve or fourteen? In a word: NFW! Okay, well, maybe I’m being a bit cavalier and judgmental. I think the definitive answer, for me, would be that it all depends. Seriously. If there really was a meeting of the minds, twelve hours a day would probably work out. But if the interaction was more of a constant stream of grating battles… NFW!
Am I too analytic?
Don’t get me wrong, I’m not a true quant, living in a spreadsheet, but I do tend to be happier poring through documents trying to discern elements of strategy as well as weaknesses, so I typically would be seen as the analytic type. But, I wouldn’t want to be pigeonholed as just an analytic type. Yes, I do enjoy writing documents and lists, but I really don’t want that to be my main thing.
Am I not intuitive enough?
It seems to me that a lot of what successful VCs do has a significant element of intuition or gut feel, while that’s not my strong suite. Again, I lean towards attention to detail and analysis.
Three guys walk into a bar…
Here’s a thought experiment I would offer to any prospective VC candidate: Forgetting for the moment that you already know how these movies have ended, three business plans land on your desk — or you run into three entrepreneurs in three elevators, one from Friendster, one from MySpace, and one from Facebook; how would you go about deciding who, if any, to invest in.
Alternatively, the three firms are Lycos, AltaVista, and Google. Same question.
How exactly would you rank technology, technical savvy, business acumen, market potential, business plan, current user base, user reviews, confidence of the entrepreneur and their team, commitment, vision — or whatever other criteria?
Or Dell and YouTube when they were in their dorm room stage, competing with established efforts by Compaq and Google (remember Google Video??) — would I have been able to recognize their potential? And would I have been able to bet on YouTube but pass on Napster?
Me? I honestly don’t have a good, solid answer. Sure, based on my technical background I’d lean towards the more technically competent team, but I’d struggle with trying to understand what the realistic market potential really was. I’d be lost and clueless as to how to evaluate the mental profile of the entrepreneurial team. Well, okay, intellectually I would know what factors to consider, but exactly how to rate the balance between passion and realism is something I’d really struggle with.
How creative am I, really?
When I was younger, I thought of myself as being quite creative, but mostly that simply meant that I created a lot of computer programs and did things differently than others. As time went by, I began to realize that I really wasn’t as creative as I thought, especially when I looked at all of the Internet and technology startups that others were creating. In truth, I have been somewhat creative, just not on the sort of grand scale that would attract the attention of a VC firm.
How smart am I, really?
I’ve always known/thought that I was a fairly smart guy, but not in the sense of being even a near-genius on the traditional IQ scale. I wasn’t even an 800 on the SATs — I think I was 720 on math and 660 on verbal, significantly above average, but not truly up there. So, I’m certainly no dummy, but not far enough above average to make it to the big leagues on the technical front. In truth, my limited success has usually been the result of sheer force of will rather and intensity of effort rather than any kind of slam-dunk no-brainer.
These days, my energy and enthusiasm have waned enough that I no longer have the ability to muster the kind of force of will and intensity of effort to compete with all the guys who are able to easily coast on natural near-genius if not outright genius aptitude.
So much competition
It seems like there is a lot of competition with too many great candidates vying for a very limited number of positions in VC firms, especially kids fresh out of school with so much more energy and enthusiasm, not to mention young entrepreneurs fresh off of selling out their hot companies.
At least it seems this way to me. I mean, if there weren’t such competition, then I would have expected that VCs would have been beating a path to my door, begging for my attention. Of course, the other possibility is that I simply am not qualified to be a VC, so there’s no reason for any VC worth his salt to even give me the time of day. Although, I will note that every VC I have ever talked to has been very respectful and polite and answered all of my questions, and even been at least somewhat encouraging. Maybe that’s it, that they were merely being polite rather than interested in me as a potential fellow VC in any way.
Wracking my brain and overthinking
Is overthinking ever a good thing? Not to the best of my knowledge. Yes, I had been wracking my brain, trying desperately to discover or even invent a path into the land of VCs, oblivious to the fact that wracking your brain and overthinking are both very bad signs. Or, actually, they are very good signs, signs that you should stop doing what simply isn’t working.
Seriously, I really needed to simply be going with the flow, intuitive, and natural, and if that wasn’t working, it meant that me being in the VC world was just never meant to be. Accept it and move on.
Just do it?
So, why can’t I Just Do It? Nice sentiment, but in all honesty I see no clear and obvious path that I can just stroll down, from point A to point Z and, presto, I’ll be there, in my dream job. Not that it should ever be that easy, but even Steps A, B, and C are not within my grasp, let alone X, Y, and Z, or even J, K, and L.
Can they do without me?
At this stage, I am no longer able to visualize how I would actually fit in at any current VC firm that I am aware of. Not that I don’t have skills to offer that they could use, but there is enough money and enough opportunity and enough talent that they can probably all do fine without me.
Yes, they probably would do better with me, but they’re doing well enough that there is zero that I could reasonably do to persuade them otherwise.
I’ve crossed the rubicon, it’s simply too late
Have I crossed the infamous rubicon? I wish it weren’t so, but it does appear to be the case. To me, it does now feel that it is now officially too late for me to find work in the VC sector. I may not have burned my last bridge yet, but I’m getting close.
Are my technical analysis skills indeed dead-on and my assessment of no-go in VC land equally dead-on? I do indeed believe so, with a high degree of certainty.
So, why haven’t I been able to simply accept the obvious and move on? Maybe it’s simply wishful thinking, or maybe simply some residual lack of confidence in my own technical analytic skills, coupled with a significant lack of confidence in my non-technical skills.
In any case, it feels like I am there, at the end of the line. Time to admit that it is indeed too late for me to land a dream job at a VC firm, and time to simply move on, possibly to retirement.
Time for retirement?
If I think about it, if I had been able to hook up with a halfway decent VC firm twenty years ago, I really would have retired by now. So, retirement is not such an out of band option for me at this stage. Granted, retirement is not financially an appealing option for me right now, but it’s certainly a lot more appealing than all other options available to me at this juncture.
To be clear, I dearly would like to have some part-time non-hands-on consulting work right now, but it would have to be something that I really enjoyed, which I can’t imagine anymore. And it would have to be something that didn’t cause a significant level of anxiety and stress that might negatively impact my health — right now, my good health is my most valuable asset, which I intend to protect at all costs, even if it means a less financially secure retirement.
Another startup/VC bubble?
Are we in another bubble now? I’ve joked that we’ll know when we’re in another startup bubble when VCs start pestering me to join their firms. LOL… well, maybe it’s not THAT funny, just kind of sad, in a way.
Seriously, I do have some serious anxiety that we’re fairly late in the game, with 183 Unicorns chomping at the bit to IPO in the next year or two (154 when I started writing this paper less than a year ago), plenty of centurions hot on their heels, and untold numbers of early stage startups, but with a stock market that is really struggling to digest the few startups that have IPOed over the past two years. And… the Baby Boomers will be retiring in droves over the next five to ten years, causing an asset allocation shift, especially from mutual funds, away from stocks as a massive succession of waves. Okay, maybe the Chinese will buy all these companies and all the stocks that the Baby Boomers will be asset allocating out of, but maybe not. In any case, turmoil seems far too modest a word to describe the outlook for VC-funded stocks over the coming decade and longer. I have this sinking feeling that I’m way too late to the game, and even if I am allowed in, I more than likely will get stuck holding the bag a few years down the road.
How open am I really to new ideas?
Historically, I’ve always been fascinated by new ideas and new inventions, but I look at so many of the companies that are getting funded these days and shake my head — I would never have funded most of them. So, either that means that I’m clueless, or that the VC market is way too frothy to need/reward my type of vision and technical analytic skills. Granted, maybe it simply means that I’m not well-matched for a lot of the social media opportunities flooding the Internet, or… maybe not.
I’m a fan of Twitter, Facebook, and LinkedIn, but not so big a fan of a lot of the lesser social media applications. I’m dubious about a lot of the crowd-oriented technologies, but I am a fan of Lending Club and peer-to-peer lending and have been lending profitably for seven years now. I’ve used CoinBase for profitable bitcoin trading, but I’m dubious about a lot of the hype over blockchain. I see potential for drones, but I see mostly headaches for virtual reality, although I myself am a proponent for virtual travel.
So, overall, I would say that I have a balanced view of new technologies and applications, but that may not be sufficient to get in the door at a lot of VC firms these days.
Is social media a requirement to be a VC today?
I have a mixed view of social media these days. I haven’t blogged much lately, I haven’t tweeted in almost six years, and my Facebook page is mostly dormant, but I am active on LinkedIn and Medium. I wouldn’t say that I am particularly active on social media. The question is whether my limited and spotty activity on social media would rate me a no-go at most VC firms. I would say that a lot of the newer and younger firms would rate social media as mandatory, but I suspect that a spotty presence on social media would not be a significant obstacle at quite a few of the old-line VC firms.
The problem is that I don’t have enough pluses in my column to get me in the door in the first place, so my so-so social media rating would be a definite drag overall.
In short, some firms might feel that lack of social media exposure is not a problem, but many would sniff, frown, and look the other way. So, it’s semi-optional but strongly preferred. At least this is my perception.
Even if I was offered a VC position now…
I’m fairly sure that even if I was offered a VC position today that I would be strongly inclined to turn it down. I’d certainly be flattered, but mentally I’ve already moved on and the cachet of a VC position just wouldn’t deliver the emotional satisfaction that it would have even just a single year ago. Sure, maybe practical considerations and a raw sense of “you never know”, not to mention simple curiosity, might conspire to incline me to accept such an offer, but not with a lot of passion or even much in the way of simple enthusiasm. And not that such a prospect is even a very remote possibility at this juncture anyway. Not even a hint of a whisper of a slim chance. Still… you never know!
Entry-level VC position?
I would say that an entry-level VC position is essentially a no-go for me now, not that I would honestly be able to distinguish between what a junior-level and senior-level VC position would look like. I just wouldn’t have the raw energy and boundless enthusiasm that I imagine even an entry-level VC position would require these days.
Time’s up, end of career
Yeah, if I was going to make a serious move into the VC sector I should have done it a long time ago, decades ago. My time has run out. I simply don’t have another five to ten years to do whatever it might be to get into the VC sector. The window is shut. I’m facing the end of my career and the prospect of retirement as my only real, serious, credible option.
My non-VC options
These are the options that I am aware of since entering the realm of VCs is no longer (or more correctly, has never been) an option for me:
- Technical contributor. Been there, done that, far too many times. No interest on my part. Zip.
- Management. Back in my early days I thought that would be my ticket to escape from the slavery of being a technical contributor, but I was wrong. I’ve had a couple of opportunities to dabble in management roles and it just wasn’t my thing.
- My own startup. Believe me, for the longest time I tried to do this, but with no dramatic success. You need the conjunction of a decent market potential, your own ability to address the needs of that market, and a passion to do so. (Insert Venn diagram.) I’ve had some ideas, but none that had that triple conjunction, especially for market potential.
- Retirement. Financially not the best choice right now, but has a lot of appeal, especially the idea that I would have 100% of my time to work on whatever projects I envisioned at any moment.
What should I have been doing?
I have asked myself what I really should have been doing 30 years, 20 years, 15 years, 10 years, 5 years, and even 1 year ago to have made real progress on VC front. I don’t really have any great answers. I mean, if I did have great answers then it probably would have already happened.
Would an MBA have helped? Maybe. Or maybe not.
If you don’t like doing something, don’t do it well
I stumbled on that wisdom years ago, and laughed, but I guess the joke was on me. I seriously hated being stuck in technical positions doing mind-numbing software development tasks, but… I did it well, so that meant nobody had any incentive to have me do anything other than hard-core technical contribution.
I’m not sure what other choice I had. There wasn’t anything else that I had any experience doing well.
In hindsight, what short list of absolute criteria for working in the VC sector should I have critically evaluated myself against that would have given me a prompt no-go signal and saved all of this wasted time and energy? In truth, I simply don’t know. Clearly, if I did know what should be on such a list, I would have already evaluated myself against it.
I think I have covered most of the areas in this paper already, but the question remains what the key short list would be.
I think sales aptitude and persuasion aptitude — the skill of telling a good story — should be high on the list, and would have knocked me out of the running immediately. I guess I had hoped that some VC firm somewhere could capitalize on my technical skills and experience at startups and that my interest in being involved in some more advisory role in the VC business would have been sufficient to get me in the door, but… clearly I was wrong about that. Game Over.
So, was this insane quest of mine to pursue working in the VC sector merely an… obsession? The dictionary defines that as “an idea or thought that continually preoccupies or intrudes on a person’s mind”, so I guess so. But not any more, at least as soon as I post this paper. And as soon as I really move on — as opposed to merely talking and fantasizing about moving on.
I will concede, in hindsight, that my pursuit of VC work sort of was an obsession, but if I had had any inkling that it was such an unrealistic pursuit, I would have abandoned it long ago.
Okay, but so what?
Even if everything I’ve said in the foregoing is absolute gospel truth, that still doesn’t mean that I had no real chance of succeeding as a VC. The only thing I can say for sure is that is simply didn’t happen. Who knows, maybe it could still have happened just around the corner. Technically, I’m still open to a VC opportunity, but I’m probably more likely to just sniff at any proposed opportunity and walk away. I just no longer harbor that needed spark to leap and seize the opportunity if it did present itself.
I’ve effectively given up, conceded, surrendered, and admitted defeat. It is what it is. Time to move on. Early retirement now seems like a lot more attractive — or at least more realistic — opportunity than the rewardless pursuit of a position in the VC sector.
Okay, finally, let me Just Do It and start moving on. Enough said.
Although outright retirement would be preferable, I still need to remain on the lookout for any possible consulting opportunities that might boost my retirement income and assets. Otherwise, I spend my days attending panel discussion events at think tanks here in Washington, which keeps my mind very, very busy. And I do a little writing on Medium, such as this paper, which also keeps my mind busy.
Other than that, I have no fricking clue what’s next for me.
Helping others avoid my mistakes
I do sincerely hope that by posting this material I will be able to help others earlier in their careers from making my same mistakes.