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| Mark Suster Serial Entrepreneur and Venture Capitalist on Startup
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| Mark Suster is a serial entrepreneur who grew up in Northern California.
After graduating from UCSD (economics) and University of Chicago (MBA), he joined Andersen Consulting (now Accenture) in Los Angeles to build computer systems for large corporations. There, he focused mostly on computer networking but had stints with programming, database design, system modeling, and testing.
In 1994 he transferred within Accenture to their technology center of excellence in Sophia Antipolis, France, where he traveled extensively throughout Europe.
Suster started his first company in 1999 while headquartered in London - a SaaS platform for large-scale engineering and construction projects including the London Underground, Thames Water, BNP Paribas, and all of the top German construction firms. The company grew to have offices in seven countries before it was sold in 2005..
He then launched his second company, Koral, in San Mateo, California, which l...
While many legendary Silicon Valley companies were founded by teams of two, partnerships aren't without their problems, states venture capitalist Mark Suster. Disagreements arise based on personal life changes, business strategies, and roles within the company. Suster prefers to avoid playing the role of co-founder "marriage counselor" by working with a strong, individual entrepreneur.
Co-founder
While many legendary Silicon Valley companies were founded by teams of two, partnerships aren't without their problems, states venture capitalist Mark Suster. Disagreements arise based on personal life changes, business strategies, and roles within the company. Suster prefers to avoid playing the role of co-founder "marriage counselor" by working with a strong, individual entrepreneur.
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| I believe in having partners. I believe in inviting people in and giving them large stakes. That stake may even be 20%, 25%, 30%, 35% but there's kind of a mythology in Silicon Valley which is that the cofounder's model is the only model and we know it because we have Larry and Sergey and we have Steve Chen and Chad Hurley and David and Jerry. Each of these images that I pulled up, I never had to type the last name. I literally just typed Jerry and David and it came up, and I typed Steve and Chad and it came up. That's how baked into our system it is. Just because this model has worked does not mean the model works. I'm here to tell you what happens on the inside because we know most companies fail. I spent so much time as a marriage counselor with startups who don't get along, and it happens something like this. Life event, someone wants to throw himself at this company, the other person doesn't. Someone gets married and they have a girlfriend or boyfriend and they get pulled to other opportunities. Some people perform better, some don't. We had cofounders; we didn't decide who was CEO. Now we got a company and people are interested in funding us. Which one of us is going to be CEO? These kinds of issues are garden variety happen all the time. We just don't talk about them because we know this Silicon Valley myth that it always works. So for me, it's a sequencing thing. I say to people even if you started and you decided to give 45% to somebody else to do it but ultimately, I prefer a stable environment where I have a passionate founder, passionate leader, willing to share equity, willing to bring people in decision-making but divorce clauses. I saw a company recently, very interesting company that had two cofounders and one of them walked and they didn't have founder vesting, so the guy who walked has a free ride on 50% equity while the other mug sweats his, I won't say it, and tries to create something big for this guy who's not even working. If you go for the cofounder model which I'm not telling you don't do it because I know everybody likes to, make sure you have founder vesting. You protect yourself as an individual and you protect your partner by the way, too, because it might be you who decides not to work. There has to be a clause that says what happens if we fall out of love. What happens if one person's passionate and the other person isn't? I will tell you also it becomes a problem in fundraising. We look at a company. We see four founders, two of them are gone, two of them only have 12% equity each because they raised angel money. They had four founders, they started at 25, they got diluted down to 12. As a venture capitalist, I'm just thinking okay, let me tell you what happens. I put in money, your 12% becomes 8%. We do another round, your 8% becomes 5% and then I got to top you out with stock options and we play this BS game. So often when I see situations like that and I think some VCs feel like this, I just prefer not to get involved. |
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| Early Money
Serial entrepreneur and investor Mark Suster urges founders to start out on their own, to avoid early dilution. Suster believes entrepreneurs deserve to keep a greater share of their companies, when possible, as they are the ones taking the critical first leap. While Suster claims some in Silicon Valley may think this idea is "heresy," he does not understand why burgeoning entrepreneurs are willing to give so much away, so early.
Heresy. The biggest illusion that comes to you as an individual comes before you ever see an evil venture capitalist. You're going to argue to me that you should only take 22% dilution instead of 24%. We're going to fight over 0.75%. You're going to fight with me about whether we should have a 15% option pull versus 17% option pull versus 13% option pull, but you're willing to see two-thirds of the value of your company walk out the door before you've ever done a day's work. I just don't get that. I don't get it. If you're trying to create something and create value for yourself and you have the confidence of your conviction, my recommendation is to start on your own. That's the biggest heresy that I'll ever say. Now, there are people for which are missing certain skill sets to build a company. That's okay. I just have a sequencing for them. Because that you are paid such a premium to take the first leap, my Andersen Consulting experience, sitting around with a bunch of guys who just kept saying, we should do this and we should do that, and I freaking did it and then they came to work for me for 1%. They come to work for me for 1%. |
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| Smart branding for startups: 1) Your company name should be your URL address, 2) Don't let your company name box you in, and 3) Be careful of using words in your name that mean something else. Suster also explains why you should have the commitment to see your startup through
First of all, your name should be your URL. If your name is wildfire, your URL should not be wildfire-interactive.com. Call yourself wildfire-interactive. Call yourself anything but this confusion in the internet era doesn't make a lot of sense to me. Make sure your name doesn't box you into a corner. I said to Bill Gross, the guy who created Overture and just when he created a company called TweetUp, I publicly said I predict within one year this company will company will not be called TweetUp. Why would you build something that has one channel, Twitter? Why would you build something that has one channel, salesforce.com, Apple iPhone, Facebook? If you're building a product, you need multichannel. It's okay to start somewhere but if you don't start by thinking multichannel, I think you'll be in trouble. Salesforce would have you believe, and I know a thing or two about Salesforce that you ought to build on their platform called force.com. You ought to do that if you haven't thought through how to build a company, but if you've thought I want to have a multichannel strategy and I don't want to be beholden to one individual component of that channel and one player then I don't suggest it's a very good idea. So TweetUp is now called PostUp. I was right. I should have put money on it. The second prediction I made not too long ago that was that BlackBerry or the owner of BlackBerry, RIM, would be sold within a year so we'll start the clock on that one and see if I'm right on that but that's a total aside. The thing I could teach Silicon Valley is the last one, be careful about words that mean something else because I'm sort of flipping about it but I see so many young entrepreneurs these days who tell me, well, I raised $200,000. I launched and learned and I created a product. I didn't do any research. They probably don't say that but they didn't. The market didn't come so I'm shutting it down and I'm moving on to my next one. I say wow, why? Oh, well, I'm failing fast. Okay. How about those customers who signed up for your service and trusted you to at least give it your best college effort? How about those employees who joined you even if it was $45,000 a year customer support person because they believed in your vision and that you were going to stick this through? How about the person who gave you $200,000? It's okay if it was an evil venture capitalist because $200,000 is not that much money but how about everybody else? I don't believe in stupidly staying with your business. I stupidly stayed for six years. I knew that I wasn't going to make that much money. I knew that the structure of what I had built had inherent problems. I knew that I wasn't passionate about it. I probably after about four years should have recruited someone more passionate than I was, but I felt this deep sense of commitment. I just hate that there's a whole generation of people and I'm not saying everybody, but there's certainly enough of them that don't feel that same sense of commitment to see something through when you say that you were going to do it. |
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| No Internet or tech company should launch without having in-house technical manpower to build the product, says serial entrepreneur Mark Suster. While business savvy on the founding team is important, those skills need to be balanced with a sturdy base of engineering, programming, or other technical know-how. Additionally, a company makes itself more attractive to funding and acquisition if it has intrinsic technical expertise
Make sure that tech is part of your DNA. I'm probably in the wrong place to say this message because I think it's pretty well understood here, but particularly outside of Silicon Valley you see a lot of people who have third parties build their software. I'm okay if a third party builds your prototype just to get it up and running but you have got to. If you want to be an internet business or a tech business, you got to have a foundation, the DNA has got to be technical. I guess Jason Neus in LA can attest to this how many people in LA come to me and it's three business guys who know Ashton Kutcher. You don't know Ashton, do you? Did I say that to you when you came in? Okay, sorry. But I normally tell people it's for your own good, go find a tech person because this idea that I can have a third party build it for cheap somewhere else and we're the business guys, we get it. It just never works. It never scales. It never becomes interesting. People often don't think about when businesses are bought, if they're bought on profits, okay, they're buying you for a different reason but if they're really buying you in the $15 to $50 million range which I will repeat, is a lot of money. If they buy you in that range, they're often buying what you have, the technology, the market positioning but they want you, they want your team. They don't want to buy something that has eight guys remote for a third party building software.
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| Urges entrepreneurs not to be lazy when it comes to doing necessary market research. This includes having a basic understanding of who will pay for your product or service. In the age of affordable research and engineering, smart venture capitalists now expect to see at least workable prototypes from startups seeking funding. Suster suggests numerous critical questions for entrepreneurs to ponder about their market, their product, and their competition.
You need to do a bit of research. Silicon Valley, you're not going to want to hear this, is lazy. I don't mean lazy as in don't do your hard work or work long hours or productive. I certainly wouldn't accuse Silicon Valley of not being smart and innovative. It is a model or us all to learn from, myself included. But for whatever reason, this town has come up with the idea that doing research about a market is a bad thing, as though somehow I just have to launch products and learn. But the most basic of research, I'm not talking about writing an 80-page Word document. I'm talking about doing a spreadsheet, some basic economics, like if you're going to launch something, asking yourself the question, what do I imagine someday? Do I imagine someone's going to pay me for this product or am I going to monetize for third party? If they're going to pay me for it, what else are they paying for? Basic microeconomics, what am I replacing? If it's going to be third party revenues, is that going to be ad supported, is that going to be selling data? If it's ad supported, what are industry CPMs these days for a vertical offering, for a horizontal offering, for an email newsletter? If I'm in the email newsletter business, who else is in there? What are the click-through rates? What have the people who have come before done? What worked? What didn't work? When people come to see me and they don't know the history of the industry that they're choosing, I pass always because if you're not going to do that research, it tells me that you're probably not the kind of person in my opinion who's going to do big things. And yes, people win the lottery. Everyone likes to use that as an example of why I can just launch Twitter and see what happens, but the exception does not prove the rule. I'm just talking about the most basic research. You do yourself all a favor and get a prototype built. When I started BuildOnline, it took about $2 million to get the company off the ground. Why? I had to buy Sun serves; I had to buy Solaris; I had to get an Oracle license; I had to have expensive web hosting, bandwidth was really expensive. It's not longer the case. It costs $15,000 to $20,000, maybe even $5,000 to $10,000 to get initial prototypes built. I don't know. Are there engineers in the room or software developers? Can you raise your hand if you develop software? So for all you people, you have a huge advantage which is you can do most of this yourself. For anyone who can't do it themselves, I still encourage you even if it's throwaway software to get that first veneer built. Why? All this stuff Steve Blank talks about, going and testing it with customers. They can't visualize their way into deciding if you've got an interesting offering. It is far better to sit with HTML mockups and walk people through what you do and get feedback on that and say, well, what are you using today to do this and how would you imagine working through this workflow? How much would you pay for an offering like this? And being able to show people. When you're raising money being able to show venture capitalists what you have is almost a requirement these days. I still see a lot of people who are pitching ideas of what they want to build and I just don't think in 2010 that's acceptable. |
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| Most startups won't achieve the acclaim of Google, but that does not preclude these ventures from creating value for the entrepreneurs who start them. With conviction in life, and a respect for the stress, competition, and long hours of entrepreneurship, having a passionate idea that you're willing to see through to the end is the most important aspect of starting a business. Serial entrepreneur Mark Suster speak about his personal experiences in this field, and encourages entrepreneurs to find their passion and build their enterprise to be better than their own hype
I'm here to talk about getting started, raising venture capital and some lessons that I learned. I'll start at the kind of most superficial level which is having an idea and it sort of sounds obvious but this is actually where most people get stuck. If I look at the funnel of potential entrepreneurs, I think this idea phase people get crippled by it and it's the reason most people don't start businesses. I like to tell people, you actually don't have to be a genius to start a business. You have to kind of be a genius if you want to create Google, but 99.9% of successful startups are not Google and yet still lead to very rewarding careers where you can work for yourself, choose your own destiny, have your own experiences and make a lot of money doing it but you have a problem. That problem is you have to get started. So how did I get started? I was working at what was called Andersen Consulting. It's not called Accenture. I started as a software developer and we did what probably a lot of you guys do or you will do in the next five years, is we sat around with a bunch of buddies after work at a coffee shop and we talked about starting a company. We seemed to do this for about nine freaking months and nobody would do anything about it. Many years later and this is always how it goes, everyone said I had the idea to do something like Skype and if I would have only done it. I'm sure you've heard people say that. I had the idea for eBay. I had it long before eBay started. But really, people don't do anything about it, so I like to tell people if you have conviction in life to be an entrepreneur and I want to tell you and it's part of my presentation later, being an entrepreneur is not sexy. It is pretty awful. It is stress, long hours, huge responsibility, huge pressure, competitive. It is not for everybody. It's a rare unique individual who chooses to do this really crazy thing called being an entrepreneur. But if in your gut you think that's you or you want it to be you, this is the single biggest gate in gating items that keeps most people from being entrepreneurs, starting, as dumb as it sounds. The next mistake I made, and by the way I didn't start by saying this, I made every mistake at my first startup, every single one. You name it. If you read it on a blogger and a textbook, I made it. I raised too much capital. I hired too many people. I started talking in the press before my product was any good. I charged too much for my products. I staffed up quickly. I built four products in five countries. The one thing I had was the conviction to see it through. I'm going to talk about this later, this BS idea of fail fast. I said I made a commitment. I took people's money. I got people to quit their jobs. I told customers to use our product and I'm going to see this through. I'm going to be better than just having been a bunch of PR and marketing. The one mistake I made because I did see it through, the one mistake I made was I chose a topic that I wasn't passionate about. I'm passionate about technology. I'm passionate about film. I've spent a lot of time in the corporate world on corporate initiatives before I ever got started as an entrepreneur but the way that I got started was a friend of mine from business school had an idea. His idea was we could make engineering and construction firms imminently more effective and efficient. The way we would do that is we would take an industry that on average spend about 0.7% of revenue on R&D and IT and IT initiatives compared to between 1.5 to 2.4% for most companies. And because they were so far behind in IT, there was such a gap that we could really revolutionize this industry. Construction, engineering, transportation, these big projects represent between 11 to 13% of GDP; big market, ripe for innovation, actually could've done something huge. I still believe it. I just hated it. I hated going to all these stupid meetings with all the contractors and engineers. We're talking about stuff that I'm sure was really fascinating. I'm sure people have no interest in the tech stuff that I'm interested in, like I live in LA where people like to talk about scripts and Hollywood and they kind of get bored if I'm talking about Jason, but it's what I'm passionate about. Choose something that you are. |
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| Shares insights on how startups can connect with investors. He explains the best method is to access investors through other entrepreneurs. Suster speaks to the need for a startup to find their first anchor investor, whose presence can often cause additional funding sources to come forward
The best way to get access is other entrepreneurs. It's pretty easy in a social networking world to figure out how to get access to me and if you can't, that probably is a defining way of figuring out whether or not you're a real entrepreneur. It's pretty easy in this era. So how do you get our money? The first thing you need is an anchor investor. Most investors, no secret, no prices for guessing this, are not willing to take a risk and put their name on a deal and say I want to do this. At least early stage investors, they're looking for other people so you need to get an anchor investor. There are two strategies for doing this. Number one, invite them to be an adviser, get to know them, work with them as an adviser. If they get excited about you, sometimes they'll get our their checkbook. Number two, people don't like to talk about this but I always say no matter how rich you are, you want a deal. So if you could say to someone I'm planning to raise at 2.5 pre, I'd like to invite you in at 1 pre to work with me first. Getting that first person on board really matters, and everybody else sort of follows. The industry, unfortunately, the way it works is there's a lot of sheep. |
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| "Raising venture capital is worse than marriage," says investor and serial entrepreneur Mark Suster, noting that you can at least get divorced when it comes to marriage. Suster expresses surprise that a startup team would be willing to accept a funding partnership, without taking the time to truly get to know the angel or VC. This business relationship is long, intimate, and permanent, so both parties should carefully choose their partners
Raising venture capital is worse than marriage. The reason I say that, I'm very happily married and I've only been married to one woman in my whole life and I hope that always is the case. But in marriage, if things don't work in this country you can get divorced. You can't get divorced from your venture capitalist. People want to come to me. They've never met me before. They want to come in and in two weeks or a week, they want to decide whether or not to take money from me. I'm like, why would you do that? You don't know me and you don't know what it's like to work with me. I mean, don't you want to get to know me if you're going to marry me because I could bury you? I could make your life miserable as a VC. I've done six investments in the three years I've been a VC. I've done nine angel deals. I think those 15 people would say that there are some positive and there are some negative. I hope they would say the positive outweighs the negative, but all that's discoverable. Spend time getting to know these people and don't rush into it. I always say to you every VC, and I'm off topic here a little bit, is going to give you the list of the five portfolio companies you should call and of course you have to call them, but make sure you call the other five that they didn't give you. I mean I'm sure they've taught you here about selective bias. If they give you five CEOs and they don't all say this is the best firm I've ever worked with then definitely don't work with that firm. It's not that hard to research who else they worked with and that's where you ought to put your effort in the due diligence. I think it's a false dichotomy. If you want to raise small amounts of money and preserve options, focus on angels. If you really want to build something big, there are pros and cons of angels and VCs. Angels in a bad market tap out really quickly and are not able to follow on as easily. VCs who put in money and you don't prove what you were supposed to prove for your first 500k, writing the next 500k is not that painful. It's different with angels. Sometimes VCs get involved very early and then they don't spend time with you and if they decide not to fund you, there's this thing called signaling that we need to worry about, and it's true. If they don't support you, life becomes harder to raise capital. There are pros and cons of both these. It's not that easy. |
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| Too much money can be a bad thing for a growing business, says Mark Suster, serial entrepreneur. With large sums comes great expectations, and investors will expect quick movement and fast returns. Additionally, large investments can inhibit options when it comes to making a preferred exit decision
Raising capital, I always tell people that you obviously need to raise capital but be careful about raising too much. You start by raising a small amount enough to really get going. Why do I say this? There are people who build an interesting idea. It gets competitive. They have talents. They have a PhD from Stanford and they can raise $5 million from the get-go. Let's say they raise it at an $8 million and pre and they diluted more than they should. In a business, there are two problems with raising too much capital too quickly and I made both of them, I made both mistakes. Number one is the expectations of you are that you're going to do something big and you got to go fast, and I say it's like adding rocket fuel before you really know where the rocket is pointing. It's very destructive to a company. You will feel pressured to spend it and you'll feel pressured to go fast. The second thing is you take all your options off the table. Whatever you're building isn't working, wouldn't you like to have some option to safely park something, meaning a sale that's not huge but at least preserves what you've built, preserves the customers, preserves some of the jobs from the people you took out of their other companies and maybe creates a little bit of wealth for yourself? You give up that option if you raise too much too quickly.
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| Lean startup is related to size and funding levels, rather than speed and product iteration. However, once a startup finds a strong product and market fit, they will need to get "fat" quickly, in order to compete with larger companies, particularly in "winner take most" markets
Mark Suster says that a lean startup shouldn't raise that much money and then eventually if it hits product market fit should become fat. I said that. It's true. Eric Reese, one of the most beloved young speakers, lecturers in Silicon Valley, someone who's reading iRead and enjoy wrote a response which I found curious. He said Mark misunderstood the meaning of the term lean startup. Luckily, there's an internet so I pulled up the definition of lean. Without much flesh or fat, not plump, of edible meat containing little or no fat, lacking in richness, full, spare, economical. And yet he says the lean startup is about moving fast. The fast startup is about moving fast. The rapid startup is about moving fast. The quick startup, not the lean startup. Okay, it's not my movement, I'll let you have your movement but I believe in lean startup. Then something changes. You raised a little bit of money, you work on your product. You don't do what I did which is spend too much money, hire a bunch of developers before you figured it all out. What I often tell people is you should be flipping hamburgers if you're going to run a hamburger chain. That means that you're doing customer support, you're answering phone calls, you're going on sales calls, you're involved in product management, you do user testing. Raising too much capital too quickly before there's a product market fit makes this very hard to do. So I sort of agree with what Ben Horowitz said which is the fat startup, and it's okay later in life, obviously I would think this, to get a bit fat. What I mean is if you become Foursquare, you got two choices. You can sell and that $100 million outcome for most people that Yahoo reportedly had offered would have been quite the nice, but the founders that already had one exit and I think they really wanted to change the world and I think that's great. But if you're going to change the world and you wake up the sleeping lions of Silicon Valley to this opportunity, you better get fat pretty quickly because you've got yelp in town here and those guys are smart and move fast and you obviously have Facebook in town. Those guys are very smart and move very fast. So if you're going to compete with people in what people call winner take most markets, you need to be fat. So we see Groupon and LivingSocial who have raised money and are big and are growing. I don't think number 5, 6, 7, 8 are going to be that relevant in the long run. So there are times where fat is okay. |
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| If an acquisition offer falls below $100 million, it does not mean a company or its entrepreneurs are failures, says serial entrepreneur Mark Suster. He does not encourage an early sale, but he points out that not every enterprise will change the world, and there is no shame in selling a small company at the right moment. In this clip, Suster recalls turning down a $150 million offer and his ensuing regret. He shares how this experience taught him to sell his second company on time and for the right price.
There seems to be an ethos in Silicon Valley that if you don't build something worth $100 million, you're a failure. I've had this conversation with so many young entrepreneurs who get their first offer for $15, $20, $30 million and I do the math for them on what that's worth. I say okay, let's do the exercise on what this is going to look like if you do that $10 million round and what this is going to look like if you try to scale something and create something big and you might be successful and you may not. I don't encourage people to sell early. I just encourage people not to be pressured by the standard Silicon Valley mantra that you're a failure if you sell as Michael Arrington called it a deep shit company. I know that Dave McClure noted that by his standard, his actually was a deep shit company. I assure you he'll be building a very nice house wherever he chooses to live next. I learned this the hard way. I started a company in 1999 based in London called BuildOnline and at the time, we became the poster child for startup companies in Europe or at least one of the top 10 front cover of the top venture capital magazine in Europe. We were front cover of the business section of the Financial Times. I got a dot-matrix in Wall Street Journal. I was invited to the private wine cellars of Bernard Arnault to drink ancient champagne with the CEOs of 40 other companies called Sony, Dell and other companies like that. I was a really, really big deal until I wasn't. That period lasted about six months. In that period, we turned down an offer to be acquired for $150 million. We thought $150 million acquisition between three friends was chump change because I had Goldman Sachs as an investor and they were telling us we were going to IPO, and the IPO would be within a year and it would be a billion dollars. It sounds crazy now if you weren't part of those times. For those of us with less hair or gray hair, we know we lived through that. But we looked at Chemdex which became Ventro that was trading for $8 billion on $2 million in revenue, so a billion dollars seemed achievable and we gave out the spreadsheets to our employees joining, telling them how much money 0.25% was worth of the billion dollars. You do the math. We were all proud of ourselves until the world changed. My second company we built the product; in total we worked on it for about a year and a half. I had an offer to sell before I raised venture capital. When I sold my first company, I owned 10% of the company. When I sold my second company, I owned 73% of the company. Those were different outcomes for me. So I'm not saying there's a right answer for anybody. For each of you, you have to choose whether you pursue your passions, whether you really believe it's a big idea, but I like people to understand the framework. I lived in Palo Alto. My second company was based here and I was under so much pressure not to sell but luckily, second time around, I wasn't stupid. |
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| Which metrics indicate whether a venture capitalist is performing well? It's more than simple ROI. Venture capitalist Mark Suster speaks of the three career phases to examine: 1) Building a pipeline of deals, 2) Nurturing your portfolio companies, and 3) Harvesting investments and obtaining exits. He states that success in venture capital takes about a decade to determine.
How do you measure your success as a VC? Well, the interesting thing about venture capital is your success is measured hopefully on a 7- to 10-year horizon. If your performance is measured on a year or year-and-a-half horizon that means you didn't do very well. The majority of companies despite what you read about in TechCrunch take seven to 10 years to produce huge successes. My firm is the top rated firm for the year 2000. If you aggregate 2000 to 2004, we're still the top firm. If you take 2000 to 2008, we're the 12th best firm in the country. We're the firm nobody has ever heard of. They produced 15 companies worth a billion dollars or more and nobody has heard of them. Each one of those took seven, eight, nine, 10 years to mature, so this idea of quick flips, fail fast or whatever does not produce big results. So the weird thing as a VC and I actually wrote about this, people ask me on Quora if you want to go read the answer, is Mark Suster a good venture capitalist? I divided it into three phases of VC. Number one is can you get a good pipeline of deals? On that, I think I've done pretty well so I've established a name for myself in three years and gotten access to deal flow I think a lot of people don't. Number two is do you work well with your companies? Can you help them get through dark moments? Can you help them get financed? Can you help them recruit talent? The jury is still out on phase two but I'm in that phase. I've got six portfolio companies. I was up till 11:30 talking with one of the CEOs last night about his problems. That's the phase I'm in. The last phase is how well do you harvest your investments, getting trade sales, getting exits? Are you Kleiner? Can you get $400 million for ng:moco when it probably wasn't worth it? Maybe it was worth it. But if you're good at harvesting, you'll have good returns. And in the end, I'm only judged based on returns so I don't know if I'm a good VC yet. |
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