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.