What Background Makes the Best Venture Capitalists?
My father was in software sales. His advice to me: ‘Don’t be in software sales.’ A good friend of mine’s father was an attorney. His advice to his son: ‘Don’t be an attorney.’ Ask a venture capitalist who hasn’t founded a company what prior experience makes a top-notch venture capitalist, and he just might just tell you the opposite of his background. The grass is greener, so they say.
There has been a long-running debate in the venture and entrepreneurial communities about what is the best prior experience to be a successful venture capitalist. I have asked many entrepreneurs and venture capitalists their opinions on this matter, and the answers vary greatly. Is it the former entrepreneurs? The former C-level execs? The HBS Baker scholars? The guys who left the venture and startup worlds to spend 18 months at Microsoft (read: me)?
Dan Primack of peHUB wrote a little piece on this question a few weeks ago where he looked at the Midas 100 List and classified them as C-suite guys, low-level operators, and non-operators (bankers, consultants, etc.). His results were that 54 lacked operating experience, and of the remaining 46 operators, 21 were at the C-level. His conclusion: inconclusive.
I’m not going to begin to dive into questions of methodology and subjectivity, but in the words of a former mentor of mine, ‘venture capital is a funny profession.’ What he meant was that it takes all kinds of skills, all kinds of backgrounds and years to find out if you’re any good.
I recall Michael Moritz of Sequoia once remarked that since he has spent his career fighting fires, it must make him a fireman. To me, that is the soul of the successful venture capitalist: you do what is necessary to put out the fire, and how you found yourself in the middle of the blaze is irrelevant.
Andrew on the Interweb
DandyID
Twitter
ShareThis
Delicious
Facebook
Linkedin
Pandora
Google Reader
Google Profiles
Friendfeed
Technorati