A VC in Vacationland

Fred Wilson, venture capital’s consummate Blogger had an interesting post on Why Early Investing is Less Risky than Later Stage Investing.  Great post as far as you went, Fred, but in my book you missed the best part of early stage investing. 

To me, it’s the FUN of working with an early stage company–where failure hasn’t yet singed the edges of success, where the staff is all dedicated to making it happen 24X7, and where the founders are actually interested in having input. To be fair, Fred does mention that one can have more influence over early stage companies, but he does it in such a dispassionate way in his post as to make me wonder if Fred is still having fun in venture capital.  I guess after a couple of decades in the business all this stuff gets old hat, but it shouldn’t show up in your public pronouncements.

My philosophy is that I will not make an investment in a company that does not provide me with an opportunity to be involved–not just as an investor, but also as a partner helping them achieve success.  This could include introductions to other capital sources, potential customer networking, advise on product development and roll out, assistance in developing business strategies and most important, development of intelligent capital structures (more on that one in another Blog).  I like to speak with members of the leadership team on a weekly basis–not all the time, but when they need help in a space that I can provide assistance.  It adds up to a full time job for me, but one I am having lots of fun doing.

And there are those times when it is not fun.  Disagreements on Boards about direction, need for new investment, fair valuations and sales prices, among other choice issues are omnipresent in the start up space.  I have to keep reminding my fellow investors and board members that fairness in the start up world consists always of making decisions that collectively do the right thing for investors, employees and customers.  This is not always the easiest thing to accomplish but when you do, you keep the start up world fun and profitable for all participants.

So, Fred, let me see some enthusiasm in your investing philosophy, instead of looking at it as just some job.  If investing became a job for me, I’d find a new profession.