What’s It Like Being A Venture Capitalist?

Here’s my answer to this question, which was posted recently on Quora:

I love being a VC. But being a VC is much, much, much harder than people think it is (certainly harder than I thought before becoming one).

So why do I love being a VC? Because I get to work with some really smart, ambitious, and hard working entrepreneurs. Because I get to roll up my sleeves to help them build their companies into great enterprises. Because I get to constantly learn more and more about what it takes to build great companies. Because I get to share my learning with my portfolio companies every day. Because I get to make a real impact on the companies I work with. And most of all, because I get to experience the gratitude of the senior managers I work with as I see them realise their dreams.

This is especially so given that I am a partner in a firm whose core vision is to deliver significant value to each and every portfolio company. I won’t get into how we do it, but case in point is the content that our consulting team publishes on a daily basis at OpenViewLabs.

So why is it hard being a VC? The closest analogy I can think of is that investing in early stage companies is like running multiple marathons at once. Before the marathon even starts, a VC has to actually sift through thousands of companies each year to find the hidden gems. When the VC finds a gem, they have to figure out the investment thesis and put together a deal that works for both the company and the firm. Then, there’s an inordinate amount of due diligence and legal work to get a deal closed. Getting to a closed deal requires a couple of years of searching and sifting, and months of hard work to get the deal done. But all this ends up feeling like a sprint compared to what comes after the deal is completed.

Post-deal is where the real hard works begins (the marathon). I speak with my portfolio CEOs on a weekly basis to help them sort through the challenges their companies are facing. I engage with company senior managers to help them sort through operational issues. I attend monthly and quarterly board meetings (board meetings all over the country). I have to deal with difficult transitions of founding CEOs and senior managers. I have to deal with the implications of down-rounds in tough times. I have to deal with other board members who may or may not be aligned with what is best for the company or my firm. All this over the span of the 3-7 years between the close of the deal and an eventual exit.

Granted, what I describe as the marathon is what I enjoy the most. But it is also the hardest part of being a VC.

Yes, I do miss the days when I was in the startup trenches. But being a VC gives me the opportunity to work with more than one startup, and the investment model at OpenView allows me to get as close as a VC can get to the trenches.

So all in all, I can’t think if anything I would rather be doing than working as the VC that I am today. With the exception, perhaps, of training full-time for the next Tour De France — which I suspect would be slightly easier than being a VC!

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