There’s was an interesting article in yesterday’s MercuryNews about venture capitalists (VCs) who become entrepreneurs.
“Some people who came into the venture business between 1999 and today have observed that no one has made any money, unless you happen to have invested in Google and YouTube,” said Jon Holman, a venture capital recruiter in San Francisco who works closely with more than 50 firms, including Mayfield Fund and Accel Partners. “Those same people are now saying, `Maybe this will get better, but it may be time to try something else instead.’ ”
I think every VC should have experience actually working in a company. The problem? I can’t understand how they’d want to be a VC after having been in an operational role. It’s so much more interesting and fun than investing. But everyone has a different viewpoint on the matter.
After a career in the software business, I moved into the VC side in 1999, working as a private equity investor for a large investment fund.
For a while, I was a genius: Every investment I made was golden. Then April 2000 happened. And everything changed. Things got really hard. I learned a whole heck of a lot about distress financing, company and asset sales, turnarounds and the like.
In 2002, after my firm’s major operations were sold to the Monitor Group, I went to head up software at Sunbelt. And haven’t looked back.
Maybe one day when I have more time, I’ll elaborate about my experiences on that side of the business. But I’ll end with this note: Being a VC is looked on as a some kind of wonderful experience. To me, it wasn’t. I’m much happier making things, rather than trying to make money from money.