I had a bunch of discussions recently with folks asking me how things were going since I've left the VC space. I had originally planned to write about this down the road.....a couple years down the road but maybe now is an opportune time. It's been over a year now that I left the VC gig and went back to being operational. You may find my thoughts interesting, regardless of whether you are in the VC space or considering your own startup.
What's the main difference between being a VC and being an entrepreneur? Well it's hard to pinpoint one specific thing but I'd say it's the sporadic nature of your day. As a VC, I was far more scheduled and rigorous about my agenda. As an entrepreneur, you are constantly pulled in multiple directions and have to deal with things on all fronts. I find that I hardly ever stick to plan since something always shows up which has priority and has to be dealt with.
Further, dealing with HR issues plays a far greater role in your day than when a VC. HR is not a small thing.....it's the core of your business and you have to constantly pay attention to your employees. They also constantly pay attention to you as they are looking to you for direction or need something from you.
Finally, there's the constant readjusting of your company's course. I'd bet we changed or adapted three of four times in the past year. We set out with a general goal in mind but adjusted every time we realized we were doing something wrong. You have no choice but to often throw things overboard and you have to learn how to do so quickly. As a VC, you hardly ever completely change course more than once in a fund generation.
There are a hundred other things which differentiate the roles but most importantly for me is the realization that I probably was no longer well positioned as a VC. With over 12 years experience in the VC space when I left, I had become stale. I could talk about every fund minutiae or termsheet detail with you but I probably was no longer qualified to really discuss even basic details about the day-to-day of the entrepreneur. I'm sure a bunch of VC's are turning their noses up right about now but I would bet that the majority of VC's who haven't been operational in the past 10 years or less have no clue what entrepreneurs are really doing in their businesses. There are exceptions and those who have always stayed close to their portfolios. They kept adapting to the environment and are still relevant sounding boards for the companies they fund. Here I think of folks like Fred Wilson at Union Square Ventures who have been pure VC's their whole career. Unfortunately, most aren't and are shooting from the hip when dealing with start-ups. I think this post talking about Andreessen Horowitz and how all partners have operating expereince is a clear indication of what I am feeling. I know for sure that I had become one of those VC's who was too long out of the operating game to add the value that I wanted to deliver.
What's the take-away here? I know for a fact that I as a VC now would immediately have far more compassion when it comes to the entrepreneur. Although I've only been out of the direct VC game for a year, the time spent so far running a business again has been eye-opening. I'm having a blast doing it and don't miss the VC role just yet. I know for sure too that were I to go back to VC down the road, the hands-on experience would be a godsend . I'd deal with my portfolio differently than I did in the past. The discussions would focus far more on product details, HR issues and the day-to-day verses taking a very high-level view of the business and analyzing spreadsheets. Another thing I'd completely avoid is even considering telling the entrepreneur what to do. A good VC listens, gives feedback and offers support. Thinking that you know better what the entrepreneur is doing daily from a board position is nonsense. It's actually completely contradictory to what most VC's claim. They say they invest in teams but if they are defining what is to be done at board level, they obviously don't believe they've picked the best team for the job.
If you're an entrepreneur, hats off for what you've been doing day in and day out. It's hard and I have a far greater respect for what you are dealing with. If you're a VC, I sure hope you are one of the group that is addressed in the Techcrunch article linked to above. Otherwise, I feel your days may be numbered. If they are, go start a company and you'll understand why.