Entrepreneurs Teach VCs to be VCs

Isaak Karaev stopped by and left a comment in yesterday's thread. Isaak is one of the first entrepreneurs I backed in my career. I got involved in his company Multex in the early 90s, almost twenty years ago now. I backed him again more recently. It was the first investment we made at Union Square Ventures and we sold that company a few years ago.

It's been a while since I talked to Isaak so I was happy to see him stop by. His comment reminded me of the early days of Multex, when I was a "wet behind the ears VC" who didn't really know what I was doing. In my reply to Isaak's comment, I stated that entrepreneurs teach VCs how to be VCs.

You can only learn so much from other VCs. I apprenticed my way into the VC business working with (and for) two VCs who got started in the late 60s/early 70s. They taught me a lot about finding and researching opportunities, structuring deals, managing a fund, and working with limited partners. 

But those skills, as important as they are, do not make you a great VC. The key to all great VCs is the way they connect with entrepreneurs, work with entrepreneurs, and build value together with entrepreneurs. And you cannot learn how to do that without actually working with entrepreneurs.

So it is the entrepreneurs I worked with in the first five years I was a partner, people like Isaak, Ron Schreiber and Jordan Levy, Mark Pincus and Sunil Paul, and Seth Godin that I have to thank for teaching me how to do what I do. They had the patience to put up with my shortcomings, the candor to tell me when I was screwing up, and the talent to build great companies that I got to attach my name and reputation to.

When young people in the VC business ask me how to get to the top, I tell them to be patient, to do good deals, to work with entrepreneurs, and learn the business by doing the business. Like all things, there is no other way.

#VC & Technology

Comments (Archived):

  1. Dennis Buizert

    I had a response written up, but couldn’t translate it from dutch to english to an extend that it would make sense.Luisteren, Samenvatten en Doorvragen.Listening, summarizing, questioning (according to translate).

    1. fredwilson

      i like that

      1. Dennis Buizert

        Thank you. It’s an interview technique. Sadly, I could not find an english article explaining it. Otherwise I would have added that.

        1. sigmaalgebra

          For an English ‘article’ on the ‘interview technique’ of “Listening, summarizing, questioning”, consider:Thomas Gordon, ‘Parent Effectiveness Training:  The Tested New Way to Raise Responsible Children’, New American Library, New York, 1975. 

        2. Donna Brewington White

          Sounds a lot like what is referred to as “active listening”

          1. sigmaalgebra

            Right, and that’s what’s in Gordon’s book.

  2. tyronerubin

    Great sunday positive post, exactly what I needed, thanks.

  3. William Mougayar

    But the VC’s in question would “want” to learn from entrepreneurs. Some VC’s think they know it all once they become VCs, and they forget that the entrepreneur is the client, not the other way around. If that quote makes it on mugs or t-shirts, it should be given to VC’s, not entrepreneurs reading these posts.

  4. awaldstein

    Refreshing post.I’m certain that when you started in the biz, the idea of transparency didn’t exist on any scale.It would make a great series of posts on how you started to realize and act on this idea. It was and is very bold and you deserve the credit for pushing this big change in the industry forward.

    1. Matt A. Myers

      I too would love a post on how this lineage progressed. 🙂

    2. fredwilson

      Post bubble and crash reflection was the impetus

      1. awaldstein

        Make a great interview topic.Big shift to counter a big problem.

        1. William Mougayar

          Let’s put Fred in the hot seat and interview him on Nov 9th. AVC regulars William, Arnold, Charlie, Tereza & Donna interview Fred Wilson on Being a VC. 

          1. awaldstein

            5 interviewers to 1 interviewee sounds like an inquisition.You guys can have my spot to even the odds.

          2. William Mougayar

            Like The View. Fred’s call on the #. I think of it like a conversation. 

          3. Donna Brewington White

            But it would be a friendly inquisition.  We’d play nice.  Maybe.

          4. William Mougayar

            Exactly. Like The View, but without the fights.

          5. Tereza

            TOTALLY like The View!Oh, baby this is gonna be FUN.Fred’ll be lucky if he can get a word in edgewise.

          6. Tereza

            With a few good bottles of wine, Arnold, anything is possible.I think Señor Fred can take the heat.

          7. Tereza

            Split the time. Half we interview him. Second half he can interview us.Carlotta Perez was just a warmup for the Big Leagues.

  5. ShanaC

    What is the most valuable thing you learned from an entrepreneur?  You mention a lot about connecting, but nothing specific.

    1. fredwilson

      The need to create mutual respect and trust

  6. Le-el Sinai

    From what you’re saying, it seems like there are two sets of skills necessary to be a successful VC: the pre-deal and post-deal. Most understand the pre-deal skills – necessary for finding and going through with the right investment. However the real art comes from the post-deal side of the coin, where a VC doesn’t merely sit back and watch his/her investment grow, but instead plays a key role in the growth of a portfolio company and its entrepreneurs.

    1. fredwilson

      Post deal is everything because when entrepreneurs pick VCs (the key to succeeding pre deal), they focus on post deal skills

  7. Scott Barnett

    and yet now you are commonly viewed as a VC that teaches Entrepreneurs how to start businesses… so, when was the “tipping point” when you went from student to teacher?  And I’m sure you’ll say you are still learning from the entrepreneurs that you work with (I would expect nothing less!), but your “value add” beyond capital has long been viewed as the collaboration with the entrepreneur.

    1. fredwilson

      “If you really want to learn something, teach it”Not sure who said that but it is true

      1. William Mougayar

        I think the original one is “Teaching is learning twice”. 

      2. Matt A. Myers

        If you want to learn something, read about it; if you want to understand something, write about it; if you want to master something, teach it.- YOGI BHAJANIt’s one of my favourite quotes. My yoga teacher trainer put this quote on the front of our first teacher training manual.

        1. andyidsinga

          would add to those : ‘if you really want to learn something, practice it’ ..over and over and over and …PS – David Brin’s ‘The Practice Effect’ – awesome novel 🙂 http://en.wikipedia.org/wik

        2. JamesHRH

          It is also the mantra of teaching hospitals:- watch it- do it- show itEach PoV of the task teaches you something you could not see from any of the other PoVs.

          1. LE

            Actually it’s “teach one” or more accuratelysee onedo oneteach onehttp://virtualmentor.ama-as…(It you play with different word variations in google the above is the one that comes up the most potential matches.)

          2. JamesHRH

            Thanks LE.I got the quote anecdotally from an eye surgeon friend – never thought of the web tightening it up for me.Good reminder of online accuracy being out there. I am just not one for “playing around with the word combinations…”

  8. William Mougayar

    Do VCs that were entrepreneurs make a better VC? You are certainly the exception, but we see a lot of newcomer VCs that tout having been entrepreneurs 1,2,3 times and now they are VCs and we’re supposed to bow at them. I think they still have to prove themselves as good VCs which is another ball game in its own. But the question remains- does it help the VC if they were an entrepreneur? 

    1. Ela Madej

      I’d say – yes… having that experience gives a great perspective and may cut the VC learning curve by years. Then again – I am an entrepreneur not a VC, I sometimes mentor startups.Why wouldn’t it help?

      1. Donna Brewington White

        Love. love love your “tag line” (for lack of knowing what better to call it).”I dream big and I laugh a lot.”Wish I had thought of that one first.

        1. Ela Madej

          Thanks Donna! It’s not treademarked, I will be happy to share it 😉 

    2. Matt A. Myers

      Fred was a coder though, no?Successful entrepreneurs these days are creatives + do’ers, so they can figure out things. Any VC who’s capable of figuring out things (in a creative way, and not merely financial data) could take the leap into being an entrepreneur.Otherwise I imagine there’s a level of experience required to allow for different experiences to show you the Good, the Bad, and the Ugly possibilities.

      1. LE

         “Successful entrepreneurs”I think you have to separate “successful” and “ones you’ve heard about” or “ones the media talks about”.As only one example in one industry take Donald Trump. Donald would be viewed as a success and you might look at his qualities when determining what makes a successful real estate developer. But of course there are actually bigger real estate developers and more successful ones that you have never heard of (even in NYC) because they keep a low profile or for any number of reasons.

    3. fredwilson

      I think they doBut they also make the worst VCs tooOn Oct 23, 2011 9:12 AM, “Disqus” <>

      1. William Mougayar

        So it’s a toss-up. That’s what I thought. Thanks for confirming this. So, when a VC says they have been 2-3 times entrepreneurs, that doesn’t make them a better VC necessarily. 

        1. fredwilson

          Hall of fame players can be hall of fame coachesBut it is not a given that they will be

          1. William Mougayar

            Great analogy. Love it. 

          2. matthughes

            An anecdotal sports comment… (great entrepreneurs can certainly become great VC’s)Lenny Wilkins (NBA) is the only Hall of Fame player I can think of who became a HofF coach.Mike Ditka was a H of F NFL player who won a Super Bowl as a coach.Joe Torre was a nine time all star and won the NL MVP as a player but will definitely go into the MLB Hall of Fame as a manager.You see a lot of great MLB players become great managers – it’s pretty rare in the NBA and NFL.

          3. JamesHRH

            I don’t think Lenny ever won a title – he’s one of those 25 years of .600 record types….

          4. matthughes

            He was the coach of the 1979 NBA champions – Seattle Sonics.Won a gold medal as a coach too – 96 Olympics.You’re right though – he was almost more famous for the 25 years, .600 record.

          5. William Mougayar

            Sonics Champions in 1979- I was there living in Seattle! Jack Sikma, Gus Wiiliams, Dennis Johnson, Downtown Freddy Brown, John Johnson, Wally Walker & Lenny Wilkens. That team is carved in my memory.Lenny was a Hall of Famer both as a player & coach. Check his Wikipedia page.

          6. JamesHRH

            Matt – I don’t know you but I am pretty sure either of us could have coached the USA to the ’96 Gold.That means he got lucky once – with Jack Sikma coaching form the floor, too. @williammougayar (w DJ and Gus coaching from out there too!)It is very analogous to the comment that started this thread – a founder who hits ONE out is not a known startup quantity. Could be lucky, could be a terrific startup CEO.When they get one out and go VC, they are pretty much telling you they are ‘soulless financial trolls’ or that they knew they got lucky and don’t have the stones to go back and do it again.

          7. matthughes

            I’d love to coach an Olympic team, sign me up.Still, you can’t take a championship (or a successful business) away from someone.Once they do it, that achievement is theirs forever.They might only do it once, and might even try to replicate that success but fail many times.But at least they did it once.

    4. pfreet

      Sometimes entrepreneurs get lucky, hit a home run on their first startup. It’s those entrepreneur turned VCs who I worry the most about.

      1. PhilipSugar

        Yes in this case its very easy to think you know everything.  When in reality you know very little.

      2. JamesHRH

        I have a long list of people who did just that, only to find out VC is one of the toughest businesses to get into in a sustainable fashion.They all ended up ‘one fund and done’.

      3. William Mougayar

        Agreed. It takes a long time to show success as a VC. Raising a fund, becoming a partner, and investing in a few companies is only the beginning. It doesn’t show anything yet about the track record.

  9. Ela Madej

    Thanks for sharing. In fact, that sounds about right for most interactions between people.  Great relations are symmetrical, inspiring and beneficial for both sides. And I don’t mean the $$$ level, I mean the total value. Wisdom is a sum of many experiences and viewpoints.If you (not you personally, in general) don’t let your ego overcome you, if you care, you’re willing to listen & process the information you hear, willing to admit that you are wrong from time to time and willing to share what’s in your head & heart, there’s no way you will NOT grow.+ and I can’t imagine someone NOT being inspired if they get to work with a great mind! 

  10. bussgang

    I’ve always maintained that my children have taught me how to parent.  And so the notion that it is the entrepreneurs that teach us to be better practitioners of our business really resonates.

    1. fredwilson

      And your first child teaches you the most

      1. Guest

        One reason that 1st child is often the favorite.  

        1. JLM

          Ch 1 — how not to parent — play favorites.  I know as I am the author of “How Not To Parent”.

        1. JamesHRH

          Will! Shana!

          1. William Mougayar

            I believe Jeff is a friend of Fred. This looks like he inadvertently left out his signature. Not a biggie. He is known to the community already. Any one of us could reply to him & suggest he edits it out. The moderator’s dashboard doesn’t allow me to edit someone’s comment. I can move it, but not edit it. I think @Disqus could have a feature where if you place ## twice, it cuts off at that point. I know it’s a pain to Select & Cut out the signature from mobile.

          2. JamesHRH

            Mostly kidding, which is hard to put in a comment!

          3. William Mougayar

            We take our job very seriously. No kidding allowed!Just kidding.

          4. JamesHRH

            V funny.I think.

          5. ShanaC

            We’re on the sporadic, in and out. I caught some spam and deleted it from my phone (I think, this is the first time I’m using the mobile method) I can’t edit Mr. Bussgang’s comment thoughSent from a phone, forwarned

          6. JamesHRH

            Shana – half kidding….

          7. William Mougayar

            Anyone who pokes at the mods will be blacklisted.Just kidding 🙂

        2. William Mougayar

          Hey Jeff,I love your book & have bought it. Do u mind pls edit/deleting your signature to make things consistent. Thanks

  11. Srini Raja

    Startups are a lot about learning, continuous learning. The journey is quite rewarding for folks who are always on the thirst to learn more and not so much for the others.In fact today, most jobs around the world require you to learn something on a daily basis. That is probably one of the reasons why it is difficult to reduce the unemployment rate with old methods.



  12. Matt A. Myers

    VCs teach entrepreneurs how to pitch, too.

    1. William Mougayar

      The nice ones do. Not all 🙂

      1. Matt A. Myers

        That’s just apart of the lesson too — there are assholes in the world, people who will take advantage of you, etc.. 🙂

    2. fredwilson


  13. Robert Thuston

    Be patient… by working for an elder VC and learning from them for a number of years?orBe patient… by learning the business by doing the business?

    1. fredwilson

      I did bothI recommend both

  14. Cam MacRae

    The key to all great VCs is the way they connect with entrepreneurs, work with entrepreneurs, and build value together with entrepreneurs.This part of The Equity Equation is probably the most important, but it never seems to figure into the press release.Go figure.

  15. Roger Chabra

    Good post. VC is certainly an apprenticeship business. There are no shortcuts. And there is only so much energy can substitute for experience in the VC world.

  16. RadJaz

    I think young vc’s should not only learn from entrepreneurs but from angels and super angels alike. There’s too much emphasis on capital and while that’s an important function, angels and super angels provide more than that. A VC should be continuing the mentoring the angels provided except at a higher level since the startup is moving toward higher levels.

    1. William Mougayar

      But they need to also have a network and influence. These can only be acquired over time, one by one almost. 

      1. Srini Raja

        http://www.wired.com/magazi….You can build network and influence within a short time. Trust – that takes a long time 🙂

        1. William Mougayar

          Maybe it’s semantics. Network and influence are meaningless without trust. If people trust you, they listen to you and act. Yuri Milner is a big exception, buying his way into Silicon Valley. What he does after is more important than what he did now which is to put money.

          1. fredwilson


          2. JamesHRH

            Great call Will – he is a sharp eyed opportunistic trader of mezzanine stage start ups, but nothing more, at this point.

        2. fredwilson

          Not sure he has done either, yet

        3. FAKE GRIMLOCK


      2. RadJaz

        Absolutely, but I’m commenting on their approach and demeanor rather than their network. If you lack the resources to implement good mentoring it’s certainly less effective however simply being well connected doesn’t make you an extraordinary VC. Most VC companies have great connections but they are only as good as the person connecting them with the startups. Jaz

  17. Vineeth Kariappa

    So, when do you get to work with me?

    1. fredwilson

      What are you working on?

      1. Vineeth Kariappa

        xklsv.com, edgzz.com with xklsv.tv, xklsv.me, xklsv.net, xklsv.org, xklsv.mobi, xklsv.in, xklsv.biz, xklsv.be, xklsv.ws, xklsv.info, peregrinating.com, allthebookx.com, always-be-fit.com, lifehastaughtme.com, discover-places.com, always-be-healthy.com, edunett.com……Still working on the design/ UI. Get tons of “advice”, none worthwhile.

        1. fredwilson

          Is there one of these urls i should look at to see the best representation of your vision?

          1. Vineeth Kariappa

            xklsv.com is the platform, edgzz.com is the website builder for the platform. The other sites were what I got built on the platform. You can look at any site. (I like xklsv.tv, in the process of obtaining rights for movies.)

        2. Luke Chamberlin

          Here’s some advice: the name of your service is impossible to pronounce or remember.Some great advice from Dharmesh Shah on naming your company: http://onstartups.com/tabid

          1. Vineeth Kariappa

            he name can be changed, its tough to change the product. And pls try getting an easy to remember domain name w/o VC.

          2. Luke Chamberlin

            You aren’t going to change the name until you raise money from a VC?So there’s a room full of VCs and they’re talking to each other and saying “have you heard about xklsv?”How do you generate buzz with an unpronounceable name?

          3. JamesHRH

            Vineeth – ping me on Twitter. Invest :30 on Skype. In < 3 days, I will have a name for you that will be URLable.Just to prove the point.

          4. Luke Chamberlin

            You aren’t going to change the name until you raise money from a VC?So there’s a room full of VCs and they’re talking to each other and saying “have you heard about xklsv?”How do you generate buzz with an unpronounceable name?

          5. Vineeth Kariappa

            xklsv is a word. A considerable number of ppl have been able to pronounce it.I don’t have a million or two to change the name. So, if a VC wants me to change the name, will do it with their money, else I’d stick to the product n business.

          6. jason wright

            All good advice, but it leads to the same problem. You need to spend a considerable sum of money to get a domain that ticks the 17 boxes, or even just the 6 or 7 most important.

          7. JamesHRH

            None of these laws is required, except that it be memorable.

        3. jason wright

          Have you trademarked xklsv? 

          1. Vineeth Kariappa


        4. testtest

          if those were my sites i’d move them into /dev/null. sorry for being harsh.

          1. Vineeth Kariappa

            Just hired designers.

          2. testtest

            here’s a site i did after a few months on the web (started off doing client work):http://bit.ly/8U65y2 (nsfw)that’s a minimum in design from someone who didn’t know anything.http://www.behance.net/ has good designers if you’re in the market.

          3. FAKE GRIMLOCK


          4. Vineeth Kariappa

            Could not reply to your other comment, so replying here. xklsv.com is not a static website like yours plus we allow people to set the background, fonts for whichever page they are looking at.

          5. testtest

            i wrote a ticket system for that site in php also (regarding it being static), not that that’s impressive #justSaying.my point was more that design isn’t that tough, and you could have done better IMO. it’s feedback; which you’re likely to get if you post links in a lively community.

        5. Luke Chamberlin

          Okay now I’m just curious. How do you pronounce “xklsv”?

          1. Vineeth Kariappa

            ask a younger person..

          2. Luke Chamberlin

            summarize:A: “can you help me with my site?”B: “sure how do you pronounce the name?”A: “ask someone else if you aren’t cool enough to get it.”great attitude. best of luck!

  18. Tom Labus

    These are good management skills: Listening and making others on your team look good and become better players.Not every VC (management) can do that.  Personality can get in the way and people can also change for the worst when they get a little power or control. It’s always interesting to see which way people go.



  19. JamesHRH

    I wish I could get @raycote:disqus to acknowledge that I am stealing this quote form him. but it ‘take two wings to fly’.I think great VCs learn VC from VCs and entrepreneurs. The problem is that most VCs only earn one wing.

  20. Nik Bonaddio

    It’s great that you have this humbleness about you, Fred, but surely you know that it’s a two-way street: the entrepreneurs are certainly learning a lot from you and things that you’ve seen in the industry. The ultimate relationship – inside of this industry or in general – should be very symbiotic, two different viewpoints and sets of experiences working in concert to build great things.In my specific case, I’m wholly cognizant of the fact that as a first-time entrepreneur, there’s a lot of things that no amount of enthusiasm, passion, or hustle will teach me. As such, finding a VC who is truly a partner in my progress will not only make my business stronger, but make me a more effective leader both today within my company and later, when it comes for me to teach others.

    1. Tom Labus

      That’s well said, Nik.

      1. Nik Bonaddio

        Thank you, Tom!

    2. fredwilson

      I agree NikHow are the Jets going to fare against the Chargers today?

      1. Nik Bonaddio

        Short answer: I think they’ll do well. They need a win, and typically West Coast terms traveling across the country to play 1p EST game have trouble playing up to par.Long answer: The algorithm shows a hard-fought, 21-20 victory for the Jets. The tipping point seems to be Philip Rivers’ rather poor passing (-0.07 NEP, which means he’s costing his team .17 of a point each time he passes, in comparison to the average QB). This factor is double against the Jets’ pass defense, which is 5th in the league at +0.13 NEP.The Jets win the game 52.85% of the time, with the top three predictors (in terms of similar teams like the Jets playing a team similar to SD) all going the way of the Jets. A quick, somewhat anomolous data points: the Jets win this game 87% of the time if they win the turnover battle; in most games, the figure is closer to 60%. As such, my recommendation would be for the Jets to be conservative in their game plan, and attack the Chargers’ weak rushing defense (-0.04 NEP).

        1. fredwilson

          WowwwwYou are like jonah hill in money ball

        2. matthughes

          Wow, terrific analysis.The Chargers have played better than most West coast teams when traveling East in recent years. 

        3. JamesHRH

          Norv needs you on speed dial …

        4. Austin Clements

          Post game reflection: It is insane how accurate you were. Jets defense against Rivers passing made the difference… ending very close to the score you suggested.

          1. fredwilson

            Revis is such a stud. he makes being a Jet fan bearable.

    3. JamesHRH

      Teacher never appears until the student will listen.Good for you for having your ears open at such an early stage in your career – you are waaaaaaaay ahead of where I was.



    5. Donna Brewington White

      I love your take on this, Nik!  Especially that you are already thinking about someday teaching others. 

  21. Vitomir Jevremovic

    Investment ecosystem in US is much more developed or evolved, compared to some other even developed locations, like EU for example. Most of VCs, angles and a like are so stoneaged that they consider entrepreneurs more like pure work force. It does sound nice when we read it needn’t be that way. Unfortunately, we only read about this.

  22. Rohan

    Thanks Fred – especially for your advice to youngsters. (I know you said VC’s but it makes for great general advice)There’s no escaping the 10,000 hours.. 🙂 

  23. Will Washburn

    This made me think: the better the entrepreneurial team, the more you’ll learn as a VC and vice versa. There has to be a continuum here.So could you say that your success as a VC largely depends on who else you can connect with? Who you surround yourself with = how much you’ll learn = how much you can improve.Can this be extended to other faucets of life? Education? Sports teams?It’s not what you’re doing, but who you’re doing it with.

  24. Ikaraev

    You are such a huge brand Fred that by just being mentioned in your post it robes off so much that in the last few hours I got a dozen of new followers on my Twitter :). But the bottom line is you are right. We both learned from each other in many ways. I learned from you about venture capital in general and how to differentiate among venture capitalists. I also learned that getting a right venture partner is important in the good times, but much, much more important in the bad times. Thanks for being a GOOD venture partner. I really appreciate it.  

    1. fredwilson

      the feeling is mutual isaak

  25. giffc

    Venture capital is one of the those strange professions where the power balance is so out of wack with the majority of whom you deal with that it is easy to become arrogant. Some fall prey to it. I had a friend who is a partner at a well known fund tell me, “this job is turning me into an asshole. ” It usually helps having been an entrepreneur yourself so that you’ve faced the hardship and skepticism personally, but that isn’t always necessary if you have the right experience and personality. I like how you try to keep it real, Fred.

    1. fredwilson

      i’ve had those “this job is turning me into an asshole moments.hell i’ve even had “those asshole moments”the supply demand problem is bad and getting worsethe number of entrepreneurs who contact me every day is mind blowingi try hard to be nice to each and every one of them. i fail at it regularly. but i keep trying.

  26. Pascal-Emmanuel Gobry

    And every once in a while a VC can teach an entrepreneur to be an entrepreneur. My friend Jeremie Berrebi taught me a lot about that. 

  27. Patrick Kane

    Great post, really enjoying the commentary as well.I got some experience over a couple of years, as a fresh faced associate, witnessing partners both w/ and w/out operating experience interacting with portfolio company managers (this was PE not VC). My strong takeaway was that former operators were, on balance, more insightful with commentary and recommendations and more effective in fostering trust and personal dialogues with management teams. Their professional networks were also generally more relevant and it helped for sourcing talent. I would suspect this correlates with returns, but that sounds like a dizzying exercise.I don’t dispute that a pure-play (i.e. no operational background) investor can be a helpful voice in a boardroom. In financial, governance, and even business development matters I think there can be tremendous value offered. But ultimately I question how far this value can extend into the day-to-day operations of an established business, and even less so for a startup. Can an investor ever have full confidence giving advice (or assessing opportunity/risk) if they haven’t first been on the other side of the table (I’m not sure that I could)? How do LPs rationalize this?  A question Fred, to try to put a point on this: would you hire an associate at USV that hasn’t first worked in an operating role of some kind?

    1. fredwilson

      What do you mean by associate?My answer depends on your meaning

      1. Patrick Kane

        Sorry, probably a bit of a misnomer. I guess I mean would you hire a junior professional within your firm (someone to groom, someone to teach) that didn’t have operating experience. Would you trust them to connect with entrepreneurs and to help inform investment decisions?

        1. fredwilson

          we don’t hire junior professionals to groomwe hire them into two year gigs and send them back out to conquer the world we invite partners to join our firm who have proven themselves as partners elsewhere

          1. Patrick Kane

            Thank you. That’s exactly what I wanted to get to. It wouldn’t surprise me if in 15 years there were very few VCs who weren’t previously entrepreneurs.  

  28. Irving Fain

    Great post Fred. This seems to speak to the argument around Business School vs. no Business School as well. No better way to learn to be an entrepreneur or VC then to go out yourself and do it. Amazing what you learn each day just by traveling the road…

  29. Douglas Crets

    What kind of a tech interviews / news blog would make you sit up and pay attention?  Any ingredients that are must haves? Also, when you reply to my comments, I don’t get an email notification, but I know that you are replying when I go to the site and see other people’s comments. I notice that you have replied, but only by chance. Is there something amiss in the coding? 

    1. fredwilson

      i bet disqus emails are going into your spam filteri like what dan is doing with splatf, for examplei read it religiously

  30. MetaconomyCEO

    If only all VCs were so humble to admit their shortcomings and be less arrogant.Good article.

  31. laurie kalmanson

    i came into startups from the church of journalism, which was already crumbling, but still clinging to its old ways.i don’t know how other people do it, but it was the only way for me.fred and flatiron partners were key to making yoyodyne go, which made it possible for me to be who i am today. (seth would have become who he is regardless)thank you.

  32. Scottwgold

    Dear Fred, I enjoyed you post.  After 25 years in the real estate investment business I had to retire early due to health reasons, however VC seams the way to go and have mad a few small deal, You mention Union Square I sold building on the corner of 16th and park ave south, I would love to have a drink or take you to lunch and perhaps we may be able to help each other. thank you Scott w [email protected]

    1. fredwilson

      scott – pls send me an email

  33. William Mougayar

    That’s a great question, Charlie. You’re good at asking them. How about you and I interview Fred in NY on Nov 9th and field more questions from this community and video-tape it. The theme being- What makes a great VC? We could set-up an environment like The View, with 3-4 hosts asking and discussing issues.  Let’s put Fred in the hot seat and continue learning from him that way. 

  34. Matt A. Myers

    You think un-kind ones will like Not checking the ‘Kind’ box? 😉

  35. fredwilson

    I will ruminate on this request charlie

  36. JLM

    The simple truth of the matter is that of all the things which drive a successful company — jockey, horse, course, oats — the oats (money) is the most indistinct consideration other than timing and magnitude.Bad jockey (leadership, management) — usually screwed.Bad horse (business opportunity, model) — often screwed.Bad course (timing, environment) — sometimes screwed but can change quickly.Bad oats (VC, size of dollars) — may be irrelevant as to source.  Almost never decisive when jockey, horse, course are good.I love the concept of “apprenticeship” and learning one’s craft.  There is a charming humble simplicity and elegance to acknowledging the slow and artful transfer of wisdom and judgment.  This is true in stone carving and finance.

  37. Donna Brewington White

    Humility = accurate self-assessmentThe basis of true confidence.

  38. Matt A. Myers

    Sounds great! I’ll stand in the background to make it look busy … – and I’ll have my arms wrapped around all the wonderful AVC ladies who attend. 😉

  39. William Mougayar

    Of course not. Tereza and Donna  come to mind. 

  40. ShanaC

    O_o ummm, most of the women here seem to have significant others

  41. Matt A. Myers

    Friendly hugs for all! I’m just an innocent Canadian boy..

  42. Cam MacRae

    Group hug?

  43. Matt A. Myers

    Just friendly contact! I just really like hugs, cuddling, puppies, rainbows.. I will hug you too Charlie – I didn’t mean to leave you out!

  44. Matt A. Myers

    You’d need to know my definition of creative in order to determine if I’m pigeonholing or not. :)I’m more referencing the idea that there are really only ideas (creative/thinking/problem solving) and execution (doing); I was thinking along lines that Making Ideas Happen book (Belsky) simply explains in an equation: 0 idea * 100 execution = 0, 100 idea * 0 execution = 0, 10 idea * 100 execution = 1000, 100 idea * 10 execution = 1000If you’re stuck at 0 on idea or execution you can’t move forward; Even finding a partner who can do something you can’t is a part of problem solving though, in my mind.My intent wasn’t in saying there’s a specific type of success; You’d have to know what my definition of success is as well – on a micro and macro level – which doesn’t necessarily mean reaching $100 million trip to the pay-window.Someone creative to me is just a problem solver. Anyone who is a thinker and a do’er can be successful.Perhaps I generalized too much in my response before.

  45. Matt A. Myers

    ” to assert certain things because of past practice in other startups they’ve invested in. “I can see this potentially being very damaging to a relationship.Re: Bonus – That sounds like logic without nuance that experience gives. Good example. Thanks.I agree with keeping cash in a small company. In my mind that’s the primary for leveraging equity of the company as apart of pay (or bonuses); A side-effect being that they’ll also work harder to make sure their stake grows. Booya!I would appreciate the discussions / suggestions too. They’d make me think, analyze and compare with what I see being important. I think that’s also when advisors are good to have for feedback, so if you have a brain-fart and forget something major that something would have an affect, then can hopefully catch it.Positive relationships for the win!

  46. PhilipSugar

    Knowing what you don’t know is the most important aspect of your knowledge.I have no issue with a VC not having operational experience, as long as they recognize that.  I have no experience in being a VC.This isn’t limited to VC’s it happens in departments as well.  Development thinks they know how to sell, sales thinks they know what it takes to develop, and marketing gets it the worst because everybody thinks they can be a marketer.Its why I’ve done them all and still dabble in each.I will agree there is nothing more annoying than having a fresh faced kid tell you what you need to do in sales when they’ve never carried a bag.So if you know what you don’t know you don’t make that suggestion and instead provide input on the “pattern matching” aspect of the industry which is easier for you to spot as an outsider.

  47. LE

     “And they tend to state these things as truths, when they have no inherent feel for how the real world works. “On a condo board I was on a Physician (the head of his hospital) said quite emphatically that we shouldn’t allow real estate signs out front because “when I look for real estate I don’t use the signs I just have a broker find me space”.  Very matter of fact.

  48. JLM

    You know you are dealing w/ an inexperienced Board member when they say — “Let’s align everybody’s interests by basing the CEO’s bonus on NOI or net profits.”

  49. Matt A. Myers

    I guess it bothers me to think the entrepreneur didn’t have the idea themself; Where did they get the idea from then? If it’s another existing idea that they are replicating or a variation on something existing? If it’s the latter then it’s creativity – no?Maybe my concept of creative isn’t aligned with what others consider creative..

  50. JLM

    I second the problem solver focus but also add the “experience” as seen through the eyes of the customer even when the customer is initially functionally blind.How can the customer really know what he “wants” when it doesn’t even exist yet?

  51. Matt A. Myers

    Right, however the parts of those things as to why they were better is being creative, innovative. Those parts are ideas in themselves. They make an old idea better.

  52. Matt A. Myers

    “Its why I’ve done them all and still dabble in each.” ++

  53. JLM

    This is the Wisdom of the Campfire kind of stuff which smart leaders force to happen.  It takes time and it takes patience.  You can’t fake it.I have always thought that one of the most rewarding things in life is to shape and mold obvious talent.Recently I had the pleasure of seeing a young guy who had spent 10 years in the military and had an MBA from a good school blossom into a very thoughtful and patient businessman in the midst of a crisis.The obvious skill with which he dealt with losing a 25+ year supervisor (his) and the manner in which he stepped into that void gave me the most satisfaction I have had in years.He was a pretty salty young guy (several combat tours, WP grad and MBA)  and I just knew he would handle it right.I called him up, told him he was in charge, asked him if he could handle the deal and told him to call me if he wanted to talk.  Then I hung up.We were down for 11 minutes and then he went to visit 20 operating units to tell them he was in charge.In life, we really don’t GET power, we TAKE power into our hands.  If we have the guts to do it.That reminds me, I think I will give that guy a raise tom’w.When I hired this guy, I told him to imagine that this very situation would present itself one day and to be learning the business from the perspective that he would likely take over in an emergency and not in an orderly transition.  

  54. Mark Essel

    Glad to see the generalist strategy put into practice Phil. Just a quick counter to “there is nothing more annoying than having a fresh faced kid tell you what you need to do in sales when they’ve never carried a bag”There’s nothing more surprising than when a fresh faced kid’s instincts are dead on, even when practical experience would guide you otherwise.We’re all diagnosing and dealing with problems that only bear cursory resemblance to the issues we tackled last year. Your continued involvement in the different areas of business keeps you sharp. Excellent advice to folks starting out.



  56. Donna Brewington White

    “nothing more annoying than having a fresh faced kid tell you what you need to do in sales when they’ve never carried a bag”I hear what you are saying, but the fresh faced kid can bring a new perspective that is valuable. It doesn’t have to be a fresh faced kid…I am sometimes involved in situations as a consultant where I lack specific operational experience, but I can see issues that those more closely involved can’t see.In this case, I find that it is better to ask questions rather than try to provide the answer. Asking the right questions can be even more helpful in getting to the right solution than presenting what I think is the answer.But that is where age and experience have taught humility. Fresh faced kids don’t often have a lot of humility, but that is part of their charm. They will get brought down to size soon enough.Edited.

  57. JamesHRH

    Fred – you should look at Nitin Nohria’s 4+2 framework, where the 4 represents a list of the required fundamentals for the success and the 2 represents the ‘flavour’ (a business specializes in 2 out of a list of 4 capabilities.Very simple & very powerful – http://www.amazon.com/What-… .

  58. JamesHRH

    That’s very typical of professionals.

  59. JLM

    What happens when you have a CEO who has his FU money in place and who has provided the money to get the baby out of the bassinett?An experienced Board member would sit down w/ a CEO and be direct, transparent and thoughtful and simply ask — what motivates you to do what you are doing?If you can’t figure out the simple motivations of the leadership, you are pretty damn stupid to fund them.Most entrepreneurs are problem solvers and while they want to make a buck in the process, they really want to solve a problem.Soulless money people usually make the mistake of not really understanding the motivations of the people who are running an enterprise.

  60. andyidsinga

    I think its perfectly reasonable to make assertions based on past experience. Hell, folks make assertions all the time based on all sorts of stuff.Then good ones are just open to being challenged and modifying as they go. The best ones, follow assertions up with ‘ fee free to challenge me on that ..this is open to debate’.

  61. Donna Brewington White

    I love to ask questions, but @Tereza:disqus  brings the intellectual horsepower and the entrepreneurial depth and relevancy.  And she’s funny.  

  62. William Mougayar

    Where is @terezan:twitter ? 

  63. Tereza

    Hey guys! Here I am!Sorry to miss the party.Sure thing, I’d be happy to grill Fred.If anyone has any embarrassing questions you want me to ask him email me at Tereza at honestlynow dot com. At just $100 per question it’s an opportunity you won’t want to miss! Gimme til tomorrow to set up the PayPal CC processing.Or, if you ask it first on honestlynow.com, I’ll ask it for free.Either way is totally cool.

  64. Donna Brewington White

    That’s hilarious! I can so relate.

  65. PhilipSugar

    Don’t misunderstand me there is nothing wrong with a fresh faced kid working (not saying what they should do but actually doing it) on something people think is impossible and running through what other people think are walls because she can’t see them.I love mentoring talent.  Top five things I do.  I have no more pride than the pride I have a the dozen Chemical Engineers I personally hired directly out of school for my environmental software company.  Three have their own  companies.  One is on the executive team of a huge public software company, one is a partner in a huge patent law firm, etc.The career placement people would always ask why I came myself instead of sending somebody.  It was the lifeblood of the company.

  66. Donna Brewington White

    Will DM you.

  67. Mark Essel

    “The career placement people would always ask why I came myself instead of sending somebody. It was the lifeblood of the company.”With a strategy like that I’d love to see your current operation live if possible. Same goes for JLM, Andy, Richard F, and other entrepreneurs at different points along the road. So far I only recognize some of my mistakes with my first swing, and any information I read which is usually either too high level, or too detailed on one particular market/story. Analysis of healthy or growing businesses takes at least a few data points, and much of that information is closely guarded.

  68. Donna Brewington White

    Yay! T is in the house!First of all, has Fred agreed to be interviewed?Secondly, Gotham Gal will be there. Maybe you should ask HER the embarrassing questions about Fred and set up HER PayPal account so that we can send our… um … donations. I am beginning to REALLY look forward to this!

  69. fredwilson

    no i have not agreed to be interviewedi need to figure out the game plan for this event

  70. ShanaC

    last year you brought teachers. this year can we bring more basic school supplies for the teachers?

  71. Donna Brewington White

    Oh, so YOU are in charge of this event. Guess we got a little carried away.

  72. fredwilson

    i don’t think that’s a good idea

  73. William Mougayar

    I think we did. It doesn’t take much to get us riled up 🙂