What skills and experience do you need to be a VC?
There are many ways to be successful in venture capital, and some of the best venture capitalists come from a variety of backgrounds: entrepreneurs, lawyers, journalists, equity analysts.
The common denominators are a passion for innovation, a commitment to working side-by-side with entrepreneurs to build businesses, and the humility to learn from those around them.
I think of VC as more of a mindset than a skillset. It’s about leveraging your experience and your network to make good investment decisions and help drive portfolio companies to success.
How did you end up becoming a VC?
My personal path was pretty focused. In 2000, in the Internet research group at Goldman Sachs in New York, we were looking at a lot of early-stage companies to get a sense of where the markets were going.
I guess I got bitten by the VC bug then.
In the summer before b-school, I basically knocked on every venture capitalist’s door in Israel.
The guys at Genesis Partners were nice enough to find a “summer project” for me to work on…I came back the following summer and then joined them full-time after that.
What’s the traditional entry point into the industry?
I don’t think there is a traditional path. The most “reliable” path is to be a successful entrepreneur with a nine-figure exit – but in that case, VC is a sort of “second career.”
For those of us who enter the industry as junior people, there is no best path and no easy way in.
My advice would be to join a quality firm with experienced partners at the principal level, and only after a few years of related experience in entrepreneurship, banking, or technology.
Do VCs operate differently in Europe vs. the US?
In terms of day-to-day operations, there isn’t much difference, but there can be a difference in mindset sometimes.
Some European VCs have become accustomed to smaller exits or start-ups targeting one national market. US VCs tend to take a broader view of opportunities and focus on companies that might be able to change the world.
One of the things that appealed to me about DFJ Esprit is the global mindset they bring to the table, and the “Silicon Valley DNA” that the firm has due to its tight connections with the rest of the DFJ Network.
Like many US firms, DFJ Esprit is innovation-driven and is laser-focused on finding the most ambitious entrepreneurs.
How has the role changed?
Like a lot of areas, I think venture capital has been positively impacted by the availability of more data, such as Crunchbase for example, and by the power of the Internet to connect people and to serve as a metric of value.
We certainly look to AngelList and Kickstarter for interesting deal flow and for signals on the attractiveness of a concept.
I think VCs today operate in a much more competitive environment than ever before – particularly in the early stage.
There are so many funding options for entrepreneurs – and we as individual VCs need to work harder than ever to get out there, source good investments, and prove our value add both as individual board members and as a firm.
Where do you see the role of VCs in the London tech scene? Is it about more than just £££?
I’d certainly like to think that the role of VCs is about much more than just money – and this is particularly true in London, a city that is full of money like no other.
Entrepreneurs in London face an almost dizzying array of financing possibilities from all manner of sources.
The best VCs, however, are better positioned to help entrepreneurs succeed due to their extensive experience in hands-on company building.
Being the CEO of a startup is one of the loneliest jobs in the world – you need to juggle investors, employees, customers, partners, and somehow manage to keep the business afloat without a roadmap to success.
We’ve been around the block a few times, hit more than a few roadblocks, and just might be able to help you navigate your way to the exit.
Gil Dibner can be contacted at @gdibner or by going to www.dfjesprit.com.