Fred Wilson: some VC lessons from one of the best in the business

A couple of days ago, Fred Wilson, co-founder and managing partner of Union Square Ventures (USV), one of the most reputable and successful VC firms in the world, and the blogger behind AVC (a must read blog for anyone interested in the startup, tech and VC businesses) posted a video of a talk (the annual Georges Doriot Lecture) that he gave at MIT in Boston.

You can see the video here:

The chat is priceless and full of VC wisdom and I thought about summarizing some of the points that I found particularly interesting:

• A VC's most important role is that of a cheerleader (...). It is everything and just very few VCs can do it.

• The best time to invest in something  is when nobody believes in it besides you (...). You have to totally believe in it and you have to know why.

• Entrepreneurs and the companies they build are the VCs' customers - not the VCs' investors, who are their shareholders. The entrepreneurs are the center of gravity in the business and VCs are service providers to entrepreneurs.

• Even though venture capital requires a sophisticated understanding of finance, technology, markets and strategy, it is ultimately a people business.

• Three things that USV looks at when investing in an entrepreneur: charisma (the ability to convince people...it goes beyond salesmanship), technical expertise (knowing how to make aomething, not outsourcing the making of sonething to somebody else but leading it), integrity (honesty).

• In order to have better chances to succeed, he recommends angel investors to build a portfolio as broad as possible - broader than that of a traditional VC - and build networks with other angel investors. He also points out that angel investors should help entrepreneurs get to the VCs to raise their series A and subsequent rounds.

• On how to getting into VC as a profession, as a general piece of advice, very graphically he recommends spending your 20s and 30s working at startups as a path to dedicating your 40s, 50s and 60s to being a venture capitalist. Ironically, he feels like the best VC investors did not take that path.

Interestingly, as a closing remark, Fred pointed out that if he was 35 now he would probably go do VC investments in emerging markets.... anyone up for the next challenge?


Until next time!

My 2016 in review: the good, the bad & the ugly (of working at a young startup)

There are just a few hours left in this 2016. It's been a curious year, a bumpy, rollercoaster-kind of ride with a lot of takeaways and learned lessons. It's time to look back and do a sincere and objective assessment from a professional standpoint.

THE GOOD
(1) 2016 has given me the opportunity to work in the kind of startup environment that I had longed for quite some time, after having worked at multinationals pretty much all my life. I see that as a big success in itself after my bet on pursuing this path and my overcoming the hurdles that I had to face as a result of immigration issues kicking me out of the U.S.

(2) I have learnt a lot of new things following my jumping into an unknown territory that included a new industry, a different role, and multiple and diverse responsibilities. I have had the opportunity to be out there "in the trenches" to a larger extent, to expand my network, to work and get to know some great colleagues and to experience first hand a different way - improvisation, flexibility, I am embracing you - of doing things.

(3) I have been able to go way beyond my comfort zone and to challenge myself as I had not done in quite some time. I am satisfied with my overall performance but, above all, I value my daring to do so. Plus I strongly feel that this has helped me gain new skills and change my personal brand, as I explained in this post.

(4) Leading a learning the in & out's of a fundraising process has been priceless. I have enjoyed every minute of it: from researching, identifying and reaching out to domestic and international investors, to crafting pitch documents, presenting to investors and at different events and negotiating. It's been the most exciting and challenging thing I have done in years.

(5) Enjoying again what going to work means. I had forgotten that magic mix of excitement, cheering, happiness, challenge, commitment... I am aware that such a thing does not last forever but experiencing it again was awesome.

(6) Last but not least, I will remember 2016 as the year in which I was given the opportunity to pursue an exciting fintech opportunity in Berlin, one of the world's tech hubs - more on that here. There is no doubt that it will be a big challenge, both personal and professional, yet I am looking forward to starting.

THE BAD
(1) Things have not finished as I had envisioned them. Twelve months ago I was fully invested in a project and had the stamina and the confidence that we were on the path to building one of the next great companies. Even after having voluntarily decided to part ways, I can't avoid a somewhat bitter feeling of unfinished work and personal failure.

(2) Internal politics. When referring to corporate feuds, I guess we all tend to think of bankers, corporate finance titans such as Gordon Gekko or of powerful Fortune 500 companies' CEOs. Unfortunately, this happens everywhere, even in young startups. And assuming of course that such feuds are no good anywhere in the vast majority of cases, I dare to say that the harmful effects are more relevant in young, smaller companies. Disappointment is probably the word that best describes how I feel about that.

THE UGLY
(1) It is cold out there beyond established corporations. Success stories tend to make people think that building a startup - from coming up with an idea through to a billion dollar IPO - is way easier than it actually is. In most early-stage cases, you have limited resources, you do not have a powerful brand to leverage in your sales pitch, you have no significant track record to negotiate with banks and other stakeholders, you face dead-ends any other day... There are times when you feel powerless. You already knew it and embraced the challenge, true...but still.

(2) Having everyone pushing in the same direction and under the same vision is tough. Being able to align everyone in the team, from the CEO to the last intern, is not an easy task. Learning (or trying) to navigate the time-bomb resulting from human relationships in scenarios of uncertainty and cash pressure, is a priceless lesson that I definitely did not learn in my managing organizations course while at business school.

(3) As mentioned above, over the last year I was able to enjoy my work again. But at the same time, I experienced some of the worst days in my career to date. By joining a young, promising project I was confident that I would experience the former, but I would have never expected the latter. Even if this has been the case, I can assure you that I have learnt a lot from the experience, from both my mistakes and those of others.


Overall, in hindsight and having had time to reflect on all these experiences, I can say that it's been a valuable year. Let's see if 2017 is a better year, with more "good's" and fewer "bad's" and "ugly's".

My best wishes to y'all for the coming year!

Startup fundraising - some simple, yet practical, lessons (I)

Over the last few months I have been working on fundraising. It is a challenging process that takes time, effort and organization. At this point I can share some piece of advice based on my own experiences which will hopefully help entrepreneurs and/or startups going through this process for the first time.

There is a lot of thorough literature out there on this topic, which has been contributed by people way more experienced than I am and who for sure have many more war stories than I do. My goal is not to provide the definitive fundraising guide but to simplify things a little and just provide some easy steps for those who get involved in this process for the first time or so. These are a few:

(1) Invest time in research: there are hundreds of investors out there and each one of them is different.  Put in some good prep time to figure out who you can contact as a potential investor in your venture. Some things to look at are:

• investment stage: angel investors and investment clubs tend to focus on very early-stage investments (ie. seed), while venture capital funds range from seed stage to early, growth and later stage - follow the letters typically attached to post-seed financing rounds in which they have participated (A, B, C, etc... - moving along the alphabet means later stage);
• sector focus: venture capital investors typically target different sectors but that does not mean that everyone targets everything. Do not waste time and energy approaching those funds whose investment strategy lies outside of the sector where your startup operates; 
• geographic focus: make sure the investors you target typically fund companies from your continent / region / country;
• business model: leaving geography and vertical aside, some investors primarily or exclusively focus on specific business models. For instance, marketplaces are really hot these days. 
• who does what: funds' websites typically provide information on the team members, their backgrounds and areas of expertise (but not necessarily their respective emails). Identify who in each team is potentially best suited re: your company;
• Crunchbase is your best friend: it is the best free database out there to research for investors and to identify rather quickly - do not forget to check investors' websites too - who can be a potential good fir for you

(2) Get introductions from your network: VCs, in particular the most reputed ones, receive countless pitches, so being able to stand out from the crowd to get their attention is critical. You will hardly succeed if you go through their general "info@vc.com" inbox. Analyze your network (e.g. LinkedIn) and ask friends, colleagues, fellow startups and other contacts to make an introduction for you; this will certainly not guarantee any funding but it will at least give your pitch a better chance to be read.  Plus it may help that friend of yours to score a point with the VC if the latter decides to fund your project.

In the absence of an introduction, find ways to avoid the general inbox. Look for the right person's email (see last bullet above), reach out via Linkedin or Angelist, etc...

(3) Try to build rapport and credibility from the outset: you are not going to be given many opportunities (most likely you will just have one shot) to get any given investor's attention. Making a good impression from minute 1 may give you the chance to start a conversation. On the contrary, a bad first impression will shut the door in your face. Yet obvious, these are some things to take into consideration:

• avoid typos, both in your communications and in the pitch deck;
• write an effective email (in particular if you have not been able to secure an introduction): in addition to some general guidelines like these, try to build a connection (e.g. referring to the addressee's past investments or industry focus, following up from a previous event where you met) with your counterpart and do your best to capture her interest (e.g. the "magic" your product is bringing to the market, any awards or competitions your startup may have won);
• be professional in everything that you do: reply promptly, follow up timely, etc.

(4) Organize yourself: unless you are operating in a very niche space (in terms of sector and/or geography), the research mentioned in (1) above may result in multiple potential leads. This means that you are going to be communicating with a lot of people/organizations and that the flow of information (who and when you have contacted, outcomes from calls/email exchanges, follow up actions, contact details, etc.)  will be very significant. You may think that your amazing memory will be able to retain everything clearly, but that is wrong. Find ways - a CRM, spreadsheets, organization tools like Redbooth etc. - to keep your information organized; otherwise you will be wasting the precious time that you need for a whole lot of other things.


In subsequent chapters I will be touching on a number of other aspects to be accounted for during the fundraising process. But I hope this helps for the time being.

Learning from tech leaders I admire

Today I have read a very interesting piece that Fast Company - one of my must-read publications -  has recently produced on Uber and its CEO Travis Kalanick. It is priceless to better understand the company's ethos and driving forces. This has led me to think a bit about some of the people in tech I admire.

When it comes to leaders in the technology space, a few names come to mind quickly to the general public. A simplified classification I have come up with - Forbes, for instance, has its own ranking of "The Richest People in Tech" - would break down such leaders in three groups:

(1) those who are no longer active or in executive roles but whose influence is still undoubted today (Steve Jobs, Larry Ellison, Bill Gates);

(2) those who have rather recently disrupted the world (and continue to do so) and have already significantly cashed out (Mark Zuckerberg, Sergey Brin and Larry Page, Jeff Bezos, Mark Cuban); and then

(3) those whose companies are on the verge of becoming - to some extent they already are - the next big thing (Travis Kalanick, Elon Musk, Brian Chesky)

Week-in week-out I read a lot of stuff about many of them. And there is always stuff you can learn and try to apply to your more mundane existence. Some takeaways for my own sake are the following:

- long term vision vs. short term profit: I love Amazon's Jeff Bezos' approach to this and how he continues to drive innovation at Amazon by continuing to invest heavily in new services and products (Prime, Amazon Web Services, you name it...), instead of giving in to The Street's pressures for boosting the company's present stock price. At the end of the day, and as obvious as it sounds, the latter will be accomplished if things work out just fine - the last months' stock price evolution being a good example.

- challenge the statu quo: I am gonna go with Uber's Travis Kalanick. I love his strength to challenge what is widely perceived as a legally-protected dated monopoly (i.e. cab service) in pretty much all countries around the world. When customers love your service the regulators can do nothing but ultimately changing the rules of the game.

- dare to dream: nobody in my view is better at this than Elon Musk. From the hyperloop train to life in Mars; from space "tourist" travel to the perfect car. If I had to pick one guy as "the" visionary, I'd pick him. Such "visions" are sometimes broadly praised and some other times hammered. However, few people feel indifferent.

- learn, learn, learn: when Mark Zuckerberg started to take the stage as Facebook's CEO and main spokesperson he was widely criticized for his relative weakness with presentation and public speaking skills. He has invested time and effort in getting better and the results have been evident, his notorious recent presentation in Chinese being a great example. Just because one is at the top of the world does not mean that he knows it all. Be humble and never stop getting better.

- be generous: you can call tax planning...or you can call it giving back to the community. Or you can argue that it is a bit of both. But the huge contributions that the likes of Microsoft's founder Bill Gates continue to make to try to make the world a slightly better place should not be unnoticed.

These are just some ideas. There are a zillion others. But I do know that working for and/or with someone you admire and look up to makes your work more rewarding. Plus it commands an extra "something" that at the end of the day results in self-improvement, additional commitment and increased loyalty.