What I’ve Learned: Week 2

Venture capital is like a dating game, maybe “The Dating Game.”

Source: https://en.wikipedia.org/wiki/The_Dating_Game

There is a constant stream of startups vying for your affection, your attention, your advice. And, of course… your money.

The challenge is that we’re emotional beings, and venture capital is a tightrope walk of the emotions.

Fall in love too quickly with [the founder, the deck, the product, the other investors, the fill-in-the-blank…] and risk waking up asking, “What happened?!?” On the other hand, if you’re going to spend $X million on your date and then years and years of your life together, you’d better really, REALLY like them.

Every week at JME Venture Capital we have a deal flow meeting, typically on Monday morning. Each team member takes a turn briefly presenting the companies that he or she is reviewing. We reserve time to have an open discussion, to whatever depth is necessary, concerning the ones that we are excited about.

The meeting is a sounding board, not unlike talking with a few of your closest friends about your date last night. The one where things are starting to get a little serious, and you actually want them to be honest.

“So… What do you guys think?”
“Should I dig deeper?”
“I’m not convinced, what am I missing?”
“Have you thought about ____?”
“I really like them. What would it take to persuade you?”
“What’s their ____?”
“I don’t get it, what do you see in them?”

And on and on…

And just like your best friends counseling you on your dating life, the best meetings contain a lot more good questions than answers.

We push each other one question at a time. In effect, one of the main jobs of a venture capitalist is to ask the right questions.

So, venture capital is like a dating game. And there are plenty of startups that I’d like to dance with, but not many with which I’d like to spend the rest of my life.

My job is to ask the right question, to reveal what’s at the heart, of the one I’m dating.

And to not get blinded by “love.”

Source: http://blogger.hollywoodjunket.com/

Check out what I learned in Week 1 as a Summer Associate with JME Ventures.

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