The whole truth about venture capital investors, part 2
Part 1
When looking for an investment company, remember - they vary greatly in style and quality. For example, some companies are very fond of entrepreneurs. Others treat them hard. Interestingly, financial success in the field of investment has nothing to do with attitudes towards entrepreneurs. Individual investors within companies also differ greatly in style, personality, knowledge, experience, ability to help, energy and ethics. I would recommend choosing the right partner within the firm, rather than the right firm.
This is contrary to intuition, and the quality of the company, of course, is important. But a partner is a person with whom you will work. The remaining members of the company you will see a couple of times in a lifetime. It is better, of course, to choose a good firm and a good partner in it, but even in the best firms there are weak partners.
It is said that earlier professional VIs were more equal in terms of business - the founders and pioneers in business, and then those whom they chose as a protégé who grew up in venture capital investors under scrutiny and with the help of rigorous training. The explosion that occurred in the late 90s led to a wide variety of people who became partners in venture investment companies. Many partners do not have much experience in VI, but were IDs in large companies, or entrepreneurs with their own start-ups, either worked as lawyers or recruiters, or came straight from business schools without any experience.
')
In each of these VIs, there are pros and cons. For example, the VI with the experience of managing a company is perfect for talking about how to do business. But they usually see the prospect worse (because they worked with one or two companies, and a professional VI could cooperate with 30 or more companies), and more reluctantly let go of the steering wheel. A former recruiter can be a great help in hiring staff - one of the important areas in which it can help. A former lawyer can help you with a parking ticket. But you can’t find a replacement for VI, who has been doing this for 20 years and has seen more strange situations with startups with your own eyes than you can imagine.
The ideal investment for a VI is one that will succeed without its help.
If your startup does not fall into the “ideal investment” category, what can you expect?
Firstly, it is necessary to understand what a startup should be done by its founders. It may happen that whatever VI does, it will not be able to tilt the scales in your favor. In addition, CIs are usually extremely busy. When you sit in the top ten boards of directors, you look for sources of funding for new projects, you follow the rapidly changing technology industry, you give presentations from your investors - it’s hard to find free time. Although, sometimes you can stumble upon a lazy VI ... But I will tell you about this when I am a little more drunk.
It is best to assume that the main role of VI in your business will be only the infusion of money. Then the rest of the surprises will be pleasant. What else can help VI: hiring, strategy, presenting partners, presenting clients, additional funding, valuable advice and extensive life experience. Some firms arrange useful programs such as forums, where startups-beginners can communicate, for example, with large advertising companies. The only way to find out exactly what a given VI will help you is to ask other companies that it finances. And do not expect help to come suddenly - ask for yourself. You do not need a VI who is trying to help too much without asking you.
My acquaintances of the WI spend amazingly most of their time working with start-ups failing. The reason for this is in the definition of "ideal investment". Winners manage without their help. The best investors spend most of their time with successful startups, helping them achieve maximum success. But usually, life in investment trenches consists in attempts to start from the pusher or otherwise fix the problems of curving startups that initially fail. Imagine how sad it is?
Here's a surprise for you about the VI: their main task is often to help expand the charities that are trying to make the world a better place. The largest investors in many first-class firms do not seek profit - universities, large charitable foundations. Partly due to the fact that such firms are very patient and can wait a long time. But also because many of the richest VIs feel an inner need to help such organizations. It is difficult to notice, because investment firms do not disclose details about the activities of their partners. But more recently, after several discoveries of such details, it has become possible to take a closer look at the work of the largest investment firms in the world. For example, studying the details of the company Sequoia in connection with the purchase of Youtube by Google, you can find out that among its main investors are Amherst, Brown, Colby, Columbia, Dartmouth, Ford Foundation, Moore Foundation, Irvine Foundation, Rockefeller Foundation and Hewlett Foundation.
This is not unusual. The best CIs manage to make the world a better place in two ways: helping new companies take shape and bring new technologies and medicines to the world, and helping universities and foundations in their missions to form and improve people's lives.
Why do we need to be thankful that we live in a world where there is a VI, even if they yell at us at meetings, if we are financed at all.
Imagine a world without a professional VI. It is clear that far fewer new companies with great potential will receive funding, fewer new technologies will see the light, and fewer drugs will be invented. We should not only be grateful, we should hope that VIs will live and prosper for dozens and hundreds of years, because the companies they sponsor can do many good things. Yes, and the financing of charitable funds also does a lot of good for the world.
Remember that VIs in their current form have existed in just 40 years. And during this time, technology has flourished in an amazingly violent color compared to any other times. This is no coincidence.
Choosing investment companies and investors within companies
When looking for an investment company, remember - they vary greatly in style and quality. For example, some companies are very fond of entrepreneurs. Others treat them hard. Interestingly, financial success in the field of investment has nothing to do with attitudes towards entrepreneurs. Individual investors within companies also differ greatly in style, personality, knowledge, experience, ability to help, energy and ethics. I would recommend choosing the right partner within the firm, rather than the right firm.
This is contrary to intuition, and the quality of the company, of course, is important. But a partner is a person with whom you will work. The remaining members of the company you will see a couple of times in a lifetime. It is better, of course, to choose a good firm and a good partner in it, but even in the best firms there are weak partners.
It is said that earlier professional VIs were more equal in terms of business - the founders and pioneers in business, and then those whom they chose as a protégé who grew up in venture capital investors under scrutiny and with the help of rigorous training. The explosion that occurred in the late 90s led to a wide variety of people who became partners in venture investment companies. Many partners do not have much experience in VI, but were IDs in large companies, or entrepreneurs with their own start-ups, either worked as lawyers or recruiters, or came straight from business schools without any experience.
')
In each of these VIs, there are pros and cons. For example, the VI with the experience of managing a company is perfect for talking about how to do business. But they usually see the prospect worse (because they worked with one or two companies, and a professional VI could cooperate with 30 or more companies), and more reluctantly let go of the steering wheel. A former recruiter can be a great help in hiring staff - one of the important areas in which it can help. A former lawyer can help you with a parking ticket. But you can’t find a replacement for VI, who has been doing this for 20 years and has seen more strange situations with startups with your own eyes than you can imagine.
Ideal investment for VI
The ideal investment for a VI is one that will succeed without its help.
What kind of help you can expect from VI
If your startup does not fall into the “ideal investment” category, what can you expect?
Firstly, it is necessary to understand what a startup should be done by its founders. It may happen that whatever VI does, it will not be able to tilt the scales in your favor. In addition, CIs are usually extremely busy. When you sit in the top ten boards of directors, you look for sources of funding for new projects, you follow the rapidly changing technology industry, you give presentations from your investors - it’s hard to find free time. Although, sometimes you can stumble upon a lazy VI ... But I will tell you about this when I am a little more drunk.
It is best to assume that the main role of VI in your business will be only the infusion of money. Then the rest of the surprises will be pleasant. What else can help VI: hiring, strategy, presenting partners, presenting clients, additional funding, valuable advice and extensive life experience. Some firms arrange useful programs such as forums, where startups-beginners can communicate, for example, with large advertising companies. The only way to find out exactly what a given VI will help you is to ask other companies that it finances. And do not expect help to come suddenly - ask for yourself. You do not need a VI who is trying to help too much without asking you.
How do you spend your time, and why should you feel sorry for them?
My acquaintances of the WI spend amazingly most of their time working with start-ups failing. The reason for this is in the definition of "ideal investment". Winners manage without their help. The best investors spend most of their time with successful startups, helping them achieve maximum success. But usually, life in investment trenches consists in attempts to start from the pusher or otherwise fix the problems of curving startups that initially fail. Imagine how sad it is?
VI - the soulless sharks of capitalism, or surprisingly generous philanthropists? Or both?
Here's a surprise for you about the VI: their main task is often to help expand the charities that are trying to make the world a better place. The largest investors in many first-class firms do not seek profit - universities, large charitable foundations. Partly due to the fact that such firms are very patient and can wait a long time. But also because many of the richest VIs feel an inner need to help such organizations. It is difficult to notice, because investment firms do not disclose details about the activities of their partners. But more recently, after several discoveries of such details, it has become possible to take a closer look at the work of the largest investment firms in the world. For example, studying the details of the company Sequoia in connection with the purchase of Youtube by Google, you can find out that among its main investors are Amherst, Brown, Colby, Columbia, Dartmouth, Ford Foundation, Moore Foundation, Irvine Foundation, Rockefeller Foundation and Hewlett Foundation.
This is not unusual. The best CIs manage to make the world a better place in two ways: helping new companies take shape and bring new technologies and medicines to the world, and helping universities and foundations in their missions to form and improve people's lives.
Why do we need to be thankful that we live in a world where there is a VI, even if they yell at us at meetings, if we are financed at all.
Imagine a world without a professional VI. It is clear that far fewer new companies with great potential will receive funding, fewer new technologies will see the light, and fewer drugs will be invented. We should not only be grateful, we should hope that VIs will live and prosper for dozens and hundreds of years, because the companies they sponsor can do many good things. Yes, and the financing of charitable funds also does a lot of good for the world.
Remember that VIs in their current form have existed in just 40 years. And during this time, technology has flourished in an amazingly violent color compared to any other times. This is no coincidence.
Source: https://habr.com/ru/post/238437/
All Articles