I want to make a short note on ”ideal VC partners’ background.”
- Serial entrepreneur, who has done before and gained successful X-multiple returns,
- Senior executive with two digit years experience at a world-class enterprise, who has successfully climbed corporate ladder and run large a business unit and had P&L responsibility.
- Experienced portfolio manager, who has gone through entire fund life cycle from the beginning to the end and made a visible top quartile return with heavy involvement with portfolio companies,
- Experienced equity sales manager, who has gained his knowledge in finance and equity sales and relationship from past I-banking experience; and
- Others such as journalist, product designer (or marketer), business development specialist, technologist, professors, head hunter, lawyer, etc. who have done extensive work around venture development.
I wouldn’t say which skill-set or background is more relevant to make a strong VC firm, but in a nutshell, operational experience (unless partner wants to get involved with a LBO type of deal) is a key to succeed. That’s something what entrepreneur and investor have to bear in mind to select a right firm to partner with.
It’s been a while since I made last posting. I’ve been busy traveling (London/NYC/Boston) and completing a number business priorities right after trip. This time, I had a chance to meet with various institutions to exchange knowledge and discuss recent investment activities around the globe. Dow Jones LP Summit in last July was also quite helpful even if it was such a last minute schedule that I added onto my calendar. There were a number of big pensions, endowments, investment banks, and advisers as well as newbie running a small alternative investment program which manages less than $100M. Many different approaches and investment priorities were discussed during this event, but this year, apparently, middle market private equity and clean tech were hottest asset classes in the alternative investors’ circle.
As a true believer of early stage ventures, I have strong conviction why venture capital asset class is still very competitive even if falling exit ratio and value in the public market or private transaction:
- Early stage venture is most probable asset class which can create largest value-up.
- Entry barrier (i.e. originality with scarcity) created by innovation is a key ingredient of early stage ventures’ success. and;
- Entrepreneurial management team, which is willing to take a risk and go extra miles, and, most importantly, know when to execute and when not to (i.e. timing), really creates difference and turns seeds to fruits.
Venture asset class may not give back as sexy return as before (like early 2000s) like many industry observers have recently reported, but experienced general partners in the venture capital world continuously delivers results. Most successful ones are entrepreneurs at heart who will come back even if there are huge obstacles or past failures. Venture capitalists are not only talking about operational improvement, but creating new team and profit-generating business vehicle.
For more future Dow Jones event, you may check here.