Swinging For The Fences

There has been a lot of talk about young entrepreneurs creating all the great companies; Gates, Jobs, Yang/Filo, Bezos, Dell, Brin/Page, Zuckerberg, etc, etc.

I agree that visionary young people are worth backing and we do a lot of that at Union Square Ventures.

But there is another kind of entrepreneur I love backing even more. It's the serial entrepreneur who has had a number of successes under their belt and now wants to swing for the fences. We have a bunch of them in our portfolio and there is nothing more fun than watching someone who has a ton of experience get behind the wheel and really step on the gas.

When someone has two or three startups under their belt, they understand a bunch of things that a first time entrepreneur doesn't. They understand the value of setting a very clear vision and getting everyone on that page. They understand that they need to hire the very best people. They understand how to raise capital and pick their investors carefully. They understand how to make quick decisions and not let issues fester. They have a rolodex of talented people and potential business partners they can get on the phone or email quickly when they need them. Most of all, they ooze confidence and make everyone better around them.

These entrepreneurs usually have enough money in the bank that they are not looking for a payday. They don't build their companies to flip. They build their companies to go all the way. They are doing it for money, but they are also doing it for the thrill of the game, for ego, and to build a legacy. Those are very powerful motivators, much more powerful than money if you ask me.

If you look at our portfolio, you'll see quite a few startups created by young visionaries and quite a few startups created by serial entrepreneurs who are swinging for the fences. There isn't much else to be honest.

We are open to all kinds of entrepreneurs and we don't screen for age or track record. If you have built a web service that fits into our investment thesis, you'll get a hearing at our firm regardless of who you are and what you have done. But it is also true that we tend to back young visionary founders and successful serial entrepreneurs most of the time. That's because we've made a lot of money doing those two things and not so much doing anything else.

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Comments (Archived):

  1. Vincent Talerico

    Couldn’t agree more…

  2. Norbert Mayer-Wittmann

    LOL, GMTA! http://esh.it/creative-dest… :DThere I actually take a contrarian viewpoint. In other words: the rolodex etc. will not help — to be successful, creativity must DESTROY the establishment.:) nmw

  3. ErikSchwartz

    Practice makes perfect.

    1. nicheVC

      Practice makes permanent … Perfect practice makes perfect.

  4. Javier Munoz

    Whether it’s a serial entrepreneur or a new comer to the thrill of building a company, the person should be aware of what atitudes / actions help build teams that act quickly as a cohesive unit! Hardship & constant changes are pretty much a sure thing when building a company so you need a team that won’t crumble under pressure. What I like about serial entrepreneurs is that they have already built a team that has been in the trenches before and everyone knows how everyone else reacts under though circumstances.

  5. stevehopkins

    Well said 🙂

  6. Tom Labus

    This type of management is the exception to the rule. Most start ups are populated by those with little experience and driven by fantasies.

  7. Garbanzo

    “When someone has two or three startups under their belt, they understand a bunch of things that a first time entrepreneur doesn’t.”And a transformative manager who has been successful in corporate America (and NOT a mindless bureaucratic cog in a bigger machine), having been pitched to by hundreds of start-ups and seen what works and what doesn’t, doesn’t understand this stuff? Lots of corporate folks, particularly those from technology and bizdev, have gone on to found wildly successful start-ups. It’s just a matter of risk profile and timing, frankly. Fred seems a bit chauvinistic to me.

    1. kidmercury

      damn garbanzo that was a brutal diss you just dropped. i don’t know if fred was dissing corporate folks, perhaps he simply did not comment about them. you pack a good punch, i hope you will find a more suitable target.9/11 was an inside job,kid mercury

    2. mr. 'anything else' (sniff)

      hmmh…I think almost anyone involved in a startup will say there are all kinds of things you won’t know until you do one… getting pitched by contractors, or anyone, else, or going to school, will never really adequately prepare you to build your own house, in fact nothing will except building one.this does not mean you can’t/shouldn’t do it, it just means there is a lot less risk with someone who has done it before, and even someone who is young but extremely adaptable. Especially in the Web x.x space young people have the extreme advantage of not knowing what’s not possible.(if the Google guys had told me what they were going to do I would have referred them to a psychiatrist – a few years ago I would have been the guy hearing from others everything I said was impossible, much of which has come to pass)mr. ‘anything else’ (sniff)

    3. JLM

      Point taken however there is a reason why your flight instructor gets out of the plane when you fly “solo”. There is a reason why the opposing team “freezes the shooter” when the free throw is going to win the game.Cause there are a bunch of guys who think they can do it but only the guys who actually do it — KNOW they can do it.

    4. Rick Segal

      Actually, the stats speak for themselves. It is very very rare for a person to have a multi-year career in BigCo to then punch out for start-up land and knock it out of the park. Take the last 100 (or 500) out of the park hits and the non-emotional point is made. Bummer, perhaps, but not chauvinistic just reality.

      1. gw

        I’d love to see a formal study on any efficiency disparities that exists between BigCo and successful-start-up land. The pace, volume and diversity of hats i’ve had to wear in the latter bears little resemblance to observations of ecosystem and culture during my time in the former. My gut says most BigCo’s require significantly more resources to do the same work on a pound for pound basis.it always comes down to personnel. easier to hide in big-co if you suck…i saw a lot of disguised politicking-for-self-preservation passing itself off as management in big-co that would never cut it in a successful startup.

    5. fredwilson

      Chauvinistic isn’t the right wordI think bias against big company types is accurate but that’s not chauvanism

  8. Stephen Randall

    And you sir are in the rarefied atmosphere of visionary and serial VCs. If there were more like you, more serial entrepreneurs would be inspired to become VCs 🙂

  9. Dave Troy

    Very good point. I agree wholeheartedly. Vision is important but experience and connections are also huge assets. I am a longtime serial entrepreneur am now looking to find others to go “kill stuff” in the market. I am waiting for the right opportunity, and when it comes, we are going to be able to move at 200mph!

  10. Elie Seidman

    Great post – I agree with all of it but in particular the comment about having enough capital to really go big. While too much capital can sometimes lead to waste, it’s a great advantage to be able to set strategy based on what will work instead of based on what can be financed. And there are many strategies that simply cannot be executed on without some relatively large amount of capital. And it’s a great relief to not have to spend a huge part of my time raising capital – as I did back in 1999 when I was working on my first startup. At this point I also know what startups are really about and what they are really like. I also know that I would have a hard time doing anything else.

  11. FictiveCameron

    The distinction between knowledge and understanding is important. It’s one thing to say “Fred you just gave away the secrets of the serial entrepreneur: Hire good people, have a clear vision, and make quick decisions.” and quite another to know what any of that means in a practical sense.Serial entrepreneurs have the advantage of having done these things and having seen how poorly they can go and what it looks like when they go well. Seems like a good group to back assuming they are every bit as visionary as the young guns.

  12. BmoreWire

    What about those who come out of middle management at a startup. Would you bucket them in the young visionary category, or the serial entrepreneur category? Surely, these people fill a large portion of successful startups….

  13. Mihai Badoiu

    I believe all VCs prefer the serial entrepreneur.But what if the entrepreneur had a couple failed startups and no successes?

  14. Nate Westheimer

    This was a large part of why I decided last Spring to partner up with Aaron Cohen on AnyClip. So far, my decision has been a great one, AnyClip’s trajectory aside.The opportunity to work with someone who has literally seen it all — from the first GIF89 flashing advertisement to data-intensive operations like MenuPages — has really been fruitful for me, as one of those “visionary young people.”Vision just can’t replace experience.

  15. JLM

    What an interesting topic and observation. What interesting comments. As always.I have been an entrepreneur for as long as some folks on this comment board have been alive and am compelled to tell you that being an entrepreneur is a curse, a disease, a condition of living that cannot be changed. It is who you are and you will not be happy until you embrace that reality. That is the good news. Entrepreneurs make the absolute worst employees imaginable.The greatest fun you will have in your life is the 2nd, 3rd, 10th time you decide to start a COMPANY or to buy a COMPANY and breathe life into it. The prospect of working with folks with whom you have already been to the pay window is an amazing feeling of comfort. It’s like being in Special Forces — you know you’re good and you know that everybody else knows you’re good and you don’t have to waste any time impressing anybody you just go about your job and get it done. Why? Cause you ARE good.Remember that many successful entrepreneurs do not need VC funding when they have been to the pay window a few times themselves. They are able to self fund, they have financial followers who offer them funding, they can finance their dreams or flights of fancy with bank debt. They are a known quantity. In addition, their integrity has been established. You never learn the truth about a man’s character until they are pressed and pressed hard. Then you learn. Seasoned entrepreneurs are usually known quantities.Running a business is the packaging which surrounds the idea or product. In many instances a VC is left with a dilemma — are they financing the product, the delivery mechanism, the individual? All of the above is the right answer unfortunately. Any one of these loci can provide the failure point in an investment. Great product — horrible management. Mediocre product — superb management. Visionary leader. Which combination is the best?I fear that all too many instances the product is the real focus of the company and that the exploitation phase of the investment requires a divestiture to a going concern or the wholesale replacement of the sponsoring management. This happens so often as to be a truism. Not necessarily bad but very true in my experience.There are VCs (Austin Ventures in Austin TX is an example) who have begun to warehouse successful entrepreneurs/seasoned managers and have then found deals for them which they have then “piled on” with follow on acquisitions in the same business space (e.g. Home Away). They are building successful companies by minimizing the managment risk and by providing a growth strategy as a baseline assumption for the business. They are only looking at scalable opportunities with a “been there, done that” mentality.

    1. David Semeria

      Entrepreneurs make the absolute worst employees imaginable.Pure truth, Woody.

      1. JLM

        Karma — I am walking out of the Driskill Hotel, 1886 Room, having had brunch with my wife on Sunday at about 1:00 PM and who do I literally bump into on the corner of 6th and Brazos?Woody Harrelson (Boyd) — in town for the Austin Film Society extravaganza.Life is pretty damn weird! LOL

        1. ShanaC

          I’m too young for that show….

          1. Dave Pinsen

            You should watch an episode or two on TV Land or on a website (if it’s available on one). If cultural literacy requires familiarity with books and films from before your time, why not have a passing familiarity with a hugely popular, long-running TV show from before your time?

          2. ShanaC

            The books are not the issue- TV even from now seems to be. My parents got cable late, and internet early, and gave me books, plus let me use a lot of illegal per to peer sharing. Guess what I prefer? Books. Music. Some movies.I can’t stick with a television show, even modern ones. In new york I have friendw who sit me down and try to get me to watch, alas, it’s not quite working. I think I’ve only managed to watch one full season of any show, ever.And I just discovered javascript and this thing known as ubuntu, which is much more entertaining, even if dreamweaver sucks. I’m strange, I know- I’m that dorky girl you went to school with who never let go of books…I still won’t. You have to steal them from me, with great difficulty.

          3. JLM

            Reading is feeding — your mind.When I am interviewing people, I always ask them what they have read and what they are reading. I would never hire anybody — ANYBODY — who does not read seriously and voraciously.

          4. Dave Pinsen

            I didn’t have cable growing up either. But Cheers was on network TV.

          5. kidmercury

            good. television is horrible, nothing but propaganda and mind control. in terms of simple ways to solve a lot of problems, getting people to cut down or even abandon television would go a long way.i support your non-tv-viewing behavior. keep it up!

          6. fredwilson

            I think live sports on tv is fantastic.

          7. kidmercury

            rare exception. and would be better if it was routed through the internet and then on tv.

          8. COMRADITY

            Watching is not the same as being there though.

          9. fredwilson

            agreedsame with music and acting

    2. ShanaC

      Can’t we just name it a state of being, and chill with it- I prefer not to think of everyone I know who has ever started a business or who wants to as ill. They all seem pretty awesome to me!Maybe it’s the Special Forces thing, after a while, you learn what’s what, and you stop caring- but I say neigh to diseases, especially in Flu season. ;)Though Yay to horrible employees if you are an entrepreneur. You prefer doing your own thing and not taking directive, I assume.

  16. JLM

    On a slightly provocative and wildly off topic note but one which shows the importance of experience, real experience —Isn’t that the dilemma with the current administration? Whiz kid ideas, wizard smart people with the lowest level of practical experience in making actual decisions in the last 100 years.Taking 3 months to make a decision to commit the equivalent of 2 Army divisions to an ongoing conflict with the recommendation of the theater commander in hand? Lincoln, Roosevelt, Truman, Eisenhower, Kennedy, Reagan, Bush made more important decisions before their breakfast had been digested.From a management perspective, it would take about 600 of them to hold Eisenhower’s jock.But that is a topic for another day! Sorry! Too much coffee this morning.

    1. fredwilson

      Obama is Zuckerberghe’ll make a lot of mistakesbut his vision of what we need to do and where we need to go is right onBush was Ballmer

      1. JLM

        He HAS already made a lot of mistakes. Much as I like OJT, I prefer real experience. He is like a lot of very intelligent people, he cannot effectively lead and he cannot get the world to follow. His vision is great given his limited real life experience. Hillary was right.

  17. Joe M.

    Would be great to see some research on this. I would say successful serial entrepreneurs are much more likely to hit a homerun. But how often does that happen? I would also say these types are much more likely to burn through funding much faster because they don’t have anything to lose. If they have so much money in the bank, why wouldn’t they fund it themselves? I would look for serial entrepreneurs that are funding a certain percentage with their own money.

  18. morefromalan

    According to Paul Graham, the (generally young) graduates of Y-combinator were shocked that confidence mattered. They thought VCs didn’t understand their technology and thought of being confident as a good tactic of snowing VCs into investing.As somebody who has given their fair share of sales-pitches to executives – where chemistry is the make or break factor – I thought this was a funny perspective.I’m guessing that the VCs were paying more attention to their leadership skills than their technology.

  19. ShanaC

    Better question- much better question-There seems to be a discussion here towards a slight bias of the serial entrepreneurs, despite their lack of skin in the game (supposedly).We also seem to agree with a number of people here- you want to get people in the game as fast as possible, and give the visionary and the tenacious early starts. Especially because you want them to develop leadership skills- since apparently as a group they make errr, bad employees.YCombiator et al is a potential solution, as suggested here.My Main Question: Clearly some people think certain types here (risk profile and age are mentioned), as “That person is going to start something!” Beyond the government small business program, and parts of the MeetUp Community, why is formal mentoring as a prerogative of a community inclined towards innovation not taking place? If someone sees a person who they think belongs- they should be stuck and trained to think. Along the way, they will get ideas. And then as that happens, hopefully they will run into the people they need.It’s seems logical to do one on one mentorship. Especially in a field that keeps changing as much as this. Kind of a eat your own food. Just sayin’ Serial Entrepreneurs that create new ones by IDing those they think who will become Entrepreneurs in turn. And then those they mentored, mentor in turn. Formally.Just a thought.

    1. Nick Giglia

      Shana, I think that’s a dead-on point. The entrepreneurial community, I’ve found, is very supportive of those who come in and actively seek help, but the truly special ones offer it without being asked. A new growth of entrepreneurship is needed both in our communities and our country as a whole, and helping entrepreneurs breed other entrepreneurs would be a fabulous way to start.

      1. ShanaC

        A friend of mine made an excellent point to me:The right teacher will come when you are ready for it.Both groups have to actively seeking- but I’m thinking that it is extremely scary to figure out this process, and it might be better to jumpstart it by pre-empting all the questions.So exactly how do you start something like this. It’s clearly not just an idea thing, lots of people have ideas that would make great companies- we’re looking for something else in a group of people, and we’re looking to change communal behavior so that those people create more of themselves. Now that’s the tough part.

        1. Dave Pinsen

          When I was a teen I read an classic karate book that had this proverb in the back, “When the mind is ready, a teacher appears”. I remembered that proverb a few months later, when a black belt in that style of karate moved into the neighborhood.

  20. Glenn Gutierrez

    Great article. Definitely hits home. For example, for my team this isn’t our first go. The first one did pretty well, the second one was for kicks and the third (PopScreen) is swinging for the fences. The thing about being a serial entrepreneur is that the thrill of the game is hard to let go. After a while, it’s all about creating something disruptive before you turn 30. Still got 5 more years left until that number so here is to dreaming and even more to executing on those dreams. *Cheers!*

  21. Nick Giglia

    Great piece, Fred. I agree with many of the posters here that the Next Big Thing could come from any one of a number of areas, and there is no one background that guarantees a successful entrepreneur. I think the true genius of this post is that USV is keeping its eyes open for new opportunities without letting their ultimate mission and investing thesis be compromised.

  22. bill furlong

    FredGrt to hear that there is room for us grizzled serial guys. While I understand how some investors are enthralled with the young buck and their malleability that often comes with it, I am a much better entrepreneur than I was the first go round.Continued Good luck and keep the blogging up!

  23. JLM

    There are huge resources available to budding and successful entrepreneurs. I was in a YPO Chapter whose membership included Michael Dell and the guy who walked away with $1B from Pace Picante in San Antonio. There is a function which is called “forum” — if I tell you too much about it I will have to kill you, sorry — but it is an opportunity for entrepreneurs to explore their own shortcomings and insecurities in the company of others with the same concerns. It is one step removed from therapy.Another good group is TAB — The Alternative Board.The most important thing about receiving help is to ASK for it. Successful people, who are honest about it, understand how much chance plays into the affairs of successful people.You also have to “network” and you have to create and maintain friendships — not BFFAE friendships — but cordial, sincere friendships. Do someone else a favor.I believe in Karma because it has worked so much in my life.

  24. Dave Pinsen

    A question for the serial entrepreneurs here:What if you come up with an idea that you know is a great one, but you don’t think you have the skill sets or resources to run with it?What I’ve done so far is to sort my ideas by feasibility, with the goal of working my way up to more ambitious ones after achieving an initial success or two. I’m launching idea #1 tomorrow, and idea #2 is in development. I don’t know if the great idea I alluded to above would ever be feasible for me though, but I think a more experienced entrepreneur (particularly one with contacts in the particular industry) could totally disrupt the current system, and make a fortune doing it.Ideally, there would be a way to hand off that idea to an entrepreneur more qualified to run with it, in exchange for a small percentage of the profits if it works. How would you arrange that though?

    1. ShanaC

      If I knew that answer- I would be super wealthy.

      1. Dave Pinsen

        In the meantime, if you want to try to make a couple of bucks leveraging your knowledge of social media, send me an e-mail.


      It is possible no one has the skill set. Not because the skills are that difficult. Just because they aren’t used in the market today and the market “establishment” is slow to learn or adopt new skills until they are convinced what works is broken and the alternative can be replicated efficiently on a large scale.Resources are something else. So you’ve thought about feasibility as a criteria for prioritization and a roadmap. How about imagining the process your future customers will go through to discover you solve a problem no one else does or better than any one else? Who are the first to discover you and what are the most elementary reasons they would they adopt you? Is there a way to execute the first stage of that process on a small scale to get the most out of your limited resources? The goal here is not to get on anyone’s radar map yet – better to stay below the radar, work out the kinks, and validate your reason for being.For example, this is not where you want to be – this bicycle http://www.t-onedesign.com/… put Larry Chen on Fast Company Top 100 Creative people. Great exposure. But I can’t figure out how or where to buy one.Good luck!

    3. Matt

      Unfortunately, in the real scheme of things, execution is the only thing with value. If an idea can be patented, then you should be able to develop it to the point of protecting it without a company. If it is a business concept, then the execution is the only value.

  25. Christian Brucculeri

    I’ve seen the title of this post in my reader the past two days, and it’s been a source of inspiration.I don’t agree that entrepreneurs make the worst employees ever. I can think of a few key executives at some very big “corporate” companies who have moved on to launch fantastic companies.

  26. Mark G.

    Fred, Great post. I believe your thesis is totally reasonable and generally accurate. More often than not, someone who has the passion and talent to be an outstanding founder will have gotten started by their late-20s. However, it is great you recognize there are exceptions to every rule. As a (mostly) first-time entrepreneur in my early 40s, I hope to be an outlier.

    1. fredwilson

      Better late than never

  27. Guest

    The preview use case to find is the only valid one I can think of. What this does for me is that it makes me avoid having to go to iTunes to preview a song, since I can preview within the browser by a simple search using Google toolbar.Amazing how Google and Apple services are getting more and more overlapping!

  28. William Mougayar

    But you also need to be cautious about over-confident serial entrepreneurs that might lead one down the wrong path faster. The rocket will get propelled faster, but it might also crash harder.I’ve seen startups with a strong/seasoned team but where the hype factor exceeds the reality and validity of their story, and smart people can lead you to disasters as well as those with less experience.

    1. fredwilson

      That is for sure. One of our roles as investors is to help them avoid doing that. Usually we know these serial entrepreneurs really well

  29. mthomas1818

    I think that the govt is severely limiting the potential of new and up and coming business by continuing to prop up failed companies like Citigroup, AIG, GM, etc. They are wasting huge sums of taxpayer money that could instead be used to support new companies with sustainable business models. And until this trend changes, I think the economy is going to continue to suffer significantly. That is why I feel that one of the few ways for the average person to protect him or herself from this is to invest some portion of their portfolio in gold related assets. I recently saw some good articles at http://www.goldalert.com which discuss the policies of the Federal Reserve and Treasury and their impact on the financial markets, fiat currencies, the gold price, and particular gold mining companies that are leveraged to the gold price. One article I found especially helpful is called “Gold Price Up, Dollar Down – Does it Matter?” which talks about the history of monetary policy in the US and the consequences of the inflationary system that the Fed perpetuates.

    1. fredwilson

      Gold is the antithesis of venture capital. It is for depressed cynics

  30. mytweetmark

    Thanks for sharing this article. The timing for the read was perfect.Cheers,www.mytweetmark.com

  31. GK

    Fred – I respect your opinion and I’m sure it’s rooted in deep experience, but I can’t help but feel this is simply formulaic, narrow-minded thinking and borderline age discrimination. Not to mention, the very foundation of your argument is flawed since it maintains that young, but naive entrepreneurs are willing to take bigger risks while serial entrepreneurs (who have failed in the past or are moderately successful), are more disciplined and conservative risk takers. Isn’t this is a bit of an oxymoron? The idea that there is an ideal startup “profile” is offensive and exclusive, frankly. Hardly entrepreneurial. Why can’t VC’s support great ideas backed by great talent, irrespective of a tendency to “profile”?Regardless, I’ve heard similar, yet unfortunate, comments from other VCs and mentors, including Marc Andreesen. Yet, one need only take a slight spin on this kind of sentiment to suggest why there aren’t more funded startups founded by women, African or Latin Americans, etc. Is it because they don’t fit into an ideal startup profile???… And do VCs subconsciously dismiss them, regardless of how good their ideas or backgrounds are? I.e., if VCs are biased towards a certain startup age, gender or whatever, then I find this a sad endemic problem within the VC community and the reason for some of its own failures and lack of greater innovation. Not to demonize VCs, but comments like yours make it easier to compare VC firms with Wall Street short sellers.In short, until “prejudices” like these are called out and changed, we’ll continue to keep missing a broader range of talent and potential in this country.GK

    1. fredwilson

      I’ll take a meeting with anyone. I don’t need to see their face or even know their sex before I meet them. All I need is an email from them stating what they are working on. If its of interest, I’ll take a meetingYou know how many of those meetings turn out to be with women and american minorities?Less than 5pcnt and probably less than 1pcntThey self select themsleves out of the whole processI don’t know why or what I could do to change thatBut I don’t invest by quota. I invest in the best people and the best ideas that come my wayAnd I’m telling you what those people look like. You might not like that answer, but it is the truth

      1. Roger Toennis

        Fred,So is it the best ideas or the best people you invest in? You say “all I need is an email stating what they are working on. *IF* it is of interest, I’ll take a meeting.”So it’s really the idea that is king I guess?Seems like it might be interesting if VC’s took the approach of evaluating the entrepreneur first in some manner before evaluating the idea. I keep hearing that all the VC’s believe the people factor is more important than the idea.Yet you all seem to have the idea as first gating factor.What if you were to create a “character/experience/passion” survey on survey monkey asking any budding entrepreneur to fill it out? It would be kind of like an Ivy league school application and in no part of the application would there be any mention of the “idea” the entrepreneur was thinking of.Instead it would be all about what kind of person the survey taker is and why they want to be an entrepreneur. It would perhaps include them linking to all of the LinkedIn recommendations. It might even require some of the people who know the survey taker to come in and write recommendations for the person.Then you could pick from the people who take the survey the “all stars” and put them together on founder teams. Introduce them to each other. Make sure they match on a personality and skills level and THEN AND ONLY THEN say…”OK ladies/gents, we have a founder team. Now it’s time to brainstorm on what idea you are going to start building into reality.”It occurs to me you might actually get a few more women and minorities and other non-traditional talented entrepreneurs that today somehow are “self selected” out of the process AND get some pretty killer teams.I don’t know, maybe this is just too innovative an approach for the innovation business?Roger “the Old, (45 yr old) Non-traditional first time entrepreneur with passion talent and abilities most VCs just can’t see” Toennis;-)

        1. fredwilson

          Ah, the people vs idea question. Its a great one.Here’s how we do itWe are thesis driven investors with a very narrow domain experience. We only invest in ideas in that narrow band. That is why the idea and its stage of development is the first filterBut after passing that filter, the people are about 90pcnt of the investment decision

    2. Matt

      In my first startup, it took two years of operation to get the attention of VCs to get real funding. VCs do not create companies, entrepreneurs do. A true pathological entrepreneur may seek VC backing, but does not require VC approval. You start companies because you have to.I have no idea why there is so much gender bias in startups. Maybe it is just testosterone.But I am intrigued by one factor in your comment. I have found that there are two varieties of businesspeople. The first is folks that “brand-borrow”. Their God is HBS or Goldman or P&G or Google. They are constantly building their resume, and validation is central to their success.The other group either can’t execute on this plan or don’t know better.If you think of VC backing as another stamp on your resume, I could see why you would be angry at Fred’s post. If you must have their stamp, then not hearing their pitch is like denying them the right to apply to Harvard.Except the startup world is exactly opposite the resume-building world. VCs provide capital, not validation. Build a company. If you can’t get funding, work on it without for a bit or get by with less. If your company gels, you will get funding.But understand that for the most part VC backing is as much of a curse as a blessing. It is not a stamp of approval, it is a source of money and, occasionally, advice and access. If you want a resume, it is a terrible way to go.

  32. edahan

    Fred -“When someone has two or three startups under their belt, they understand a bunch of things that a first time entrepreneur doesn’t. They understand the value of setting a very clear vision and getting everyone on that page. They understand that they need to hire the very best people. They understand how to raise capital and pick their investors carefully. They understand how to make quick decisions and not let issues fester. They have a rolodex of talented people and potential business partners they can get on the phone or email quickly when they need them. Most of all, they ooze confidence and make everyone better around them.”Sounds like someone looking for a mortgage and putting 75% down.Elliott DahanThe Growth Groupelliott(a)thegrowthgroup.com

    1. fredwilson

      Or 50pcnt

  33. Walter Henderson

    There is already a couple of posts on TheFundedyou should read them

  34. Roger Toennis

    What about first-time entrepreneurs over 40?The people who after 20 years slogging through a mix of small and big company employment jobs make the giant leap to leave all that faux security behind and leap off a cliff into the entrepreneurial ocean? Despite having kids to feed and spouses to keep happy these stalwart folk manage to grit their teeth and dive into remaking their value proposition to society. They endeavor to become venture innovators instead of “inside the beast” innovators who had been fighting the now losing battle of innovation inside F500 companies.It’s easy for serial entrepreneurs who have already had success to swing for the fences. But the question is are they really as deeply committed to really “swinging the bat” with every fiber of their being? They already are somewhat fat and happy with payouts and adulations from prior exits”rings”. Like aging power hitters with multiple championships already perhaps they have a fallback position to go to where failure IS an option in their latest “at bat”?Young entrepreneurs do have their “athleticism” and can work crazy hours and play every inning and recover for more. But do they really know the nuances of the “game” that will allow them to “manufacture runs” with wit and guile. Like “Nuke Laloosh” in Bull Durham maybe they have a “million dollar arm” but still a “5 cent head” for the game.The over-40 first time entrepreneur who has truly taken the leap to enter the venture ocean is like the career minor leaguer who gets his first shot at “the show” in his mid to late 30s. These stalwart “players” are the ones that deeply and truly appreciate and understand the urgency of making every “at bat” count. To truly appreciate how fleeting is that chance to dance with our dreams.Like Moonlight “Doc” Graham in Field of Dreams…”It was like coming this close to your dreams….and then watching them brush past you,like a stranger in a crowd.At the time, you don’t think much of it. We don’t recognize our most significant moments while they’re happening. Back then I thought, “Well, there’ll be other days.” I didn’t realize that was the only day.”The over40 first time entrepreneur is like Doc Graham getting to step back onto that field of dreams in Iowa with Shoeless Joe and feeling the rush of youth but still having the wisdom of his true age. living his dream of wanting to….”… stare down a big-league pitcher. Stare him down, then just as he goes into his windup, wink. Make him think you know something he doesn’t.The chance to squint at a sky so blue that it hurts your eyes to look at it.To feel the tingle in your arms as you connect with the ball. To run the bases, stretch a double into a triple……and flop face first into third. Wrap your arms around the bag.That’s my wish.”

    1. fredwilson

      The data on this category of entrepreneur is not encouraging. Doesn’t mean we don’t back them. We do. But its not our bread and butter

      1. Roger Toennis

        Fred, (@Fredwilson) Do you have links to the data you refer to? I’ve seen data showing the EXACT opposite.From Techcrunch See article “Old Guys Rule” http://www.techcrunch.com/2…Quoting Vivek Wadhwa, an entrepreneur turned academic. Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Executive in Residence at Duke University…..”I’ve got a message for all the Silicon Valley venture capitalists who think a CEO is over the hill after age 40. Old guys rule. And they are far more likely to be the founder of a successful technology company than most of you understand. How do I know this? Research that my team conducted, based on a survey of 549 entrepreneurs in high-growth industries, showed that the average founder of a high-growth company launched his venture at age 40. We also learned that these founders are likely to be married and have two or more kids. They typically have six to ten years of work experience and real-world ideas. They simply got tired of working for others and wanted to rise above their middle-class heritage.Link to research paper http://ssrn.com/abstract=14…”A Life maximally lived is a series of days in which you continuously question your preconceived notions of “truth”.” – MeRT

        1. fredwilson

          I had not seen that data. I am basing mine on the collective deal history of the three firms I’ve been part of plus the other vc firms I’ve invested in over the years

  35. desmondpieri

    Another approach is to blend the “young entrepreneurs” with the “serial entrepreneur” via use of interim CEOs. Here’s when it makes sense, in my view: http://bit.ly/4qwCL1

  36. Steve Curry

    Garbanzo – agreed that many different experiences can help an entrepreneur to be successful, but, nothing succeeds like success. Some people have all the credentials, but never get a break. Those who have already had success in starting a business have a somewhat magical mix of work ethic, skills, a sense of timing and a bit ‘o luck. I would rather bet on an excellent person, who tends to be “lucky” than a “hard-luck Charlie” – wouldn’t you?

  37. RichardF

    Charlie if you know you are not too old then you are not, in my opinion.Whilst I love hearing what Fred has to say and his insight into what he is looking for in an investment, there will always be people/teams and projects that don’t fit a particular VC’s mould.I personally believe if you or your business don’t fit the mould of what a particular VC is looking for go and find another one but most importantly find a way to build it and get on with it.The last VC backed start up that I worked for was founded by two guys who gave up very well paid jobs in the corporate world. They had much more “skin in the game” than some fresh out of school computer science grad. They had large mortgages, kids in private education and most importantly wives who had grown accustomed to a certain lifestyle. The salaries that they were paid in the start up were good but not as good as they had previously earned and they had given up lucrative pension schemes.Was the start up successful? no it wasn’t, we wound it down and distributed back about $500k of what was left to the VC’s involved but both guys went onto their second start ups.One exited last year and made a healthy sum of money and is now looking for his next project, the other is still working at it. Both would never go back to the corporate world.Another thing to remember is that really what Fred is talking about is web technology investment. Who in their right mind would employ a graduate fresh out of school to head up a biotech start up or a widget manufacturing start up? In those cases it is pretty necessary that the team is built on experience of running that type of business.I think you will find the age profile of founders of VC backed start ups in the majority of sectors outside of web investment is significantly higher.

  38. nicheVC

    The point was holistic, in the perfection of process and focus, not of outcomes. Founders who spend all their days putting out fires and reacting will have a difficult time with scale and a fast growing business.

  39. ShanaC

    Charlie, as serial dude, you have resourcs that others don’t- a wider network. You know what it means to execute because you’ve executedAs I said, when you first start something, you go “Wow, how do you do that?” that’s scary. Sometimes it is just an idea. How do you build a network so that you can have an idea come to frutition quickly, espeically when there is pressure in the market to interate on your idea and get a working mockup with growth RIGHT THIS SECOND!!!As I said, there needs to be a growth thing where you id posible people before they even start hitting the growd running. Some people are still stepping. How do you teach them to walk. They need to serialize, and then teach others, so that they can become the new charlies (no offence)

  40. Dave Pinsen

    The last time I heard the phrase “perfect practice makes perfect” was at football camp when I was a kid. It probably is true for rote skills, but less so for the chaos of battle, or business. What’s that Patton quote?: “A good plan, violently executed now, is better than a perfect plan next week”.

  41. JLM

    The first casualty upon contact with the enemy is always the PLAN!The basis of every successful battle plan is — shoot, move, communicate!The basis of every successful flight plan is — aviate, navigate, communicate!

  42. JLM

    Failure is fuel. It fuels the natural sense of revenge against the hand that life has dealt to you. The blood lust of revenge can be converted into sheer unquenchable will — will to succeed. Get mad. Get even. Storm the pay window.Sometimes, failure is just tuition paid in blood. It is essential to fail without being “beaten”. It is important to fail while daring greatly. It is paramount that your “efforts” may fail but your character cannot ever be allowed to even bend. Make the hot furnace of failure harden your character and resolve.The fundamental difference between the timid salaryman and the entrepreneur, in life, is the ability to risk failure and maintain just a shred of sanity while acting with absolute integrity and a dash of daring.This is why champagne tastes so good when flavored with just a drop of success.

  43. Dave Pinsen

    I am reminded of something from my Army Reserve days. The Army leadership manual used to (I don’t know if it still does) feature prominently Civil War hero Joshua Chamberlain. His success on Little Round Top depended partly on previous practice of rote skills (the drill he used to extend his line, and then to swing it around), partly on a brilliant, daring improvisation (ordering the downhill bayonet charge), and partly on luck (the confusion of the confederates in the face of the charge and the sharpshooter fire). Maybe there are more lessons in that than in the “perfect practice” mantra.

  44. JLM

    OMG, Dave, are you trying to rekindle the Civil War? LOLAs a former professional soldier, Abn Rgr Pathfinder SF officer and graduate of the Virginia Military Institute (where Stonewall Jackson taught math and artillery), I can only tell you that you’d be speaking with a Southern accent and eating collard greens right now if Chamberlain and those Maine boys hadn’t tripped and fallen down that damn hill.It was bad enough they held their flank earlier but then to be in the middle on the last day?Gettysburg — the only time ever that Lee failed to hold the high ground all due to an unknown Yankee cavalry brigadier never heard from again. The power of punctuality!Why Lee failed to test the flanks again and sent those Virginians “up hill and up the middle” is one of the great mysteries of the War.Of course, Stonewall died in May of 1863 and the last day of Gettysburg was in July of 1863.Oh well! But you are definetely correct. “Battle drill” is everything and separates the elite units from the less elite. The bloused pants from the dirty legs.


    As mentioned above, stay below the radar (added here) until you’re ready to confront the enemy.You two should find a way to get nominated to attend together the National Security Seminar Week at the Army War College. Tour of Gettsyburg included.K—

  46. Dave Pinsen

    “I can only tell you that you’d be speaking with a Southern accent and eating collard greens right now if Chamberlain and those Maine boys hadn’t tripped and fallen down that damn hill.”^LOL. That might be the funniest thing I’ve ever read on this blog.George Marshall was a VMI alumnus too, right?Re battle drill, a good book that touched on that (I wouldn’t be surprised if you’ve already read it): “Gates of Fire”, Pressfield’s novel about the battle of Thermopylae.

  47. JLM

    I have held in my hand Marhsall’s “black book” in which were inscribed the names of virtually every General officer of WWII identified by Marshall when he was Commandant of the Infantry School and these men were Majors and Lt Cols. It is living history and the names in that book saved the world from unspeakable evil.When it comes to public service, I worship at the altar of the god which was George Catlett Marshall. I would give an appendage on the left side of my body to have ever met him.His brilliance in preparing America for war when America was not willing to be prepared; his brilliance in identifying, mentoring and training the American General officer corps in WWII; his forging an alliance to defeat the Japs and Germans as well as his service as Ambassador to China, Sec of Def, Sec of State and the Marshall Plan is the most luminous record of selfless service to our Nation since George Washington.I spent perhaps the best 4 hours of my life dining with Stephen E Ambrose and Forest C Pogue at a Marshall Society dinner in Lexington, VA listening to them speak of General Marshall. It would be a close call between duplicating that experience and making love to Catharine Deneuve in her prime!Whenever I wander off the gameboard, my wife knowing of my reverence for GCM jerks a knot in my butt by saying: “What would George Marshall have done in this situation?”In the spirit of full disclosure, I have absolutely no legitimate Southern roots whatsoever having been an Army brat with no real roots of any kind. My Father who was a career military guy always liked the VMI officers with whom he served and had a Lt who won the M of H in Korea, VMI ’50 — so he gave me my choice of VMI or VMI. It was perhaps the second best decision I ever made in my life — my wife being the best.I have read the book you note above. Another great book is “Partners in Command” by Mark Perry which relates the relationship between Marshall and Eisenhower. It is extremely insightful when you see how they worked together with complete confidence in the industrial capacity of the US and its almost limitless manpower. It is very instructive for today.

  48. fredwilson

    I told you that JLM is the woody of this blog

  49. ShanaC

    Awesome advice, and I’m lucky I got it.And I’m lucky that I’m an art student with little fear and whose already friends with chunks of the comp sci department- despite the fact that it is a theory led department. ;-). And that I am a radical so that I’m not afraid of selling something crazy.What’s the worst that could happen?

  50. Dave Pinsen

    One day when I was in (reserve) drill sergeant school we were sitting in a classroom in the Army Reserve center on Rt 17 in Lodi, NJ, with M-16s slung over the backs of our chairs, while an NCO instructor taught us out of the book. He read a quote to us, noting that it was by George Marshall, and then added, parenthetically, “Whoever the hell he was”. My father got a kick out of that when I told him about it later that day.

  51. joeagliozzo

    I think this Mark Twain quote fits this discussion (and your comments) quite well:“To succeed in life, you need two things: ignorance and confidence.”Just substitute “starting a business” for “life”, and you have the essential ingredient for being an entrepreneur. The rest is just experience.

  52. JLM

    All yours!

  53. fredwilson

    Love that attitude expressed at the end!

  54. fredwilson

    Very trueSame for a VC it turns out