Some thoughts on: So you want to do startups, eh?

20Jun11

This morning I was browsing nextMontreal news and reviewed the most recent presentation from Tara Hunt:  So you want to do a startup, eh? 

And for those who don’t know Tara, well she is pretty outspoken, and she often says out loud what other say tend to only share behind closed doors. I admire that, right or wrong, she fundamentally believes in what she is doing, and Tara is part of the few people open to sharing her experiences and thoughts on what she is living through as a tech entrepreneur. Read more: http://nextmontreal.com/so-you-want-to-do-startups-eh/#ixzz1PpddQX00

Thanks Tara! Of course its hard, its’ real hard. Try raising a venture capital fund! No difference. You need strong relationships, trust, deep commitment, an amazing team, a vision you can communicate, and timing in the market is key. And yes, location matters!

Of course, as an investor, I’d love to invest in more amazing entrepreneurs, yes I meet great startups I don’t invest in. I’d love to  be that enabler, be the one who believed in an Entrepreneur before it was all too obvious. But my reality is such that I only have 24 hours in a day, our team can only manage a limited number of investments, and our pool of capital is limited. So, what we do is try to identify the most amazing people we truly feel comfortable working with, complimentary to our other investments so we can leverage relationships and industry insights, in sectors we not only believe in but that we actually understand. And that, that’s just the starting point! So the end result is likely lots of frustration from entrepreneurs who think venture capital is just a pile of money, or worst, a bank!

I think Entrepreneurs should consider that many VCs look at an investment opportunity the same way a Startup looks at hiring an A team: You can’t hire or afford everybody that apply. Identifying the right competency, ambition and attitude is an art. Chemistry is everything. And bringing in the right person, at the right price, at the right time is no easy feat!  And you often end up hire the passive job-seeker because thats the person that has all the above attributes and with who you took the time to build the strongest relationship with!

Yes! You got to be crazy to keep doing this! But I love it!



4 Responses to “Some thoughts on: So you want to do startups, eh?”

  1. Great post, Chris. I know that we are all in it together, even though it sounds as if I’m pointing the finger at VCs here and there in my presentation.

    I am concerned, however, at how that ‘chemistry’ plays out. As you well know, most investments don’t pan out – the hope is that there are enough that do that balances it out – and I’ll bet if I did a study on the investments that don’t pan out that most of them would be ‘bandwagon’ investments. In my post, “Does anybody know what we are looking for?”, I question the pile on that happens during frenzied frothy times like this.

    I really like YC’s model: focus on the people, not the idea.

    http://m.wired.com/magazine/2011/05/ff_ycombinator/all/1

    The focus on dynamic founders seems to pan out and their odds appear higher.

    But then again, I’m not an investor…yet.😉 (that’s my next iteration)

    • I understand! And I’m driven by the people focus model, totally agree.
      Can’t wait to have you cross over to the dark side Tara🙂

  2. Great post Chris. Like the hiring analogy. That is exactly right. There is not much sympathy out in the blogosphere for the VC profession. And yes, we would all love to seed more people. But at the end of the day we are out to drive superior returns for our investors. Returns that justify the risk of making a 10 year illiquid investment. Sitting on the other side now I am only now fulling appreciating the subjective elements of the decision to fund a company. Fit, chemistry, timing are all important factors.

    • I guess that if it was not an art, not so subjective, if it was “easy”, then everybody would either own their own Company or be a VC!


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