An Inside Look at Venture Capital from the VC Perspective
Interview with Robert Kibble from Mission Ventures
“It always seems impossible, until it’s done.” — Nelson Mandela
In this interview with Robert Kibble, a Managing Partner at Mission Ventures, a venture capital firm, we discuss many things that are happening in the venture investment world. I get Robert’s perspective on a number of topics of interest to entrepreneurs. Robert co-founded Mission Ventures and has over 30 years of venture capital investing experience. Previously, he served for 13 years as a Founding General Partner of Paragon Venture Partners. Prior to that, Robert was Vice President at CitiCorp Venture Capital and he also served as Vice President of Citicorp’s Merchant Banking Group. Robert’s early career also includes investment banking on Wall Street. Robert has served as a Director of dozens of startup companies, ranging from early stage to mid size growth companies. Robert was also a Director of National Venture Capital Association (NVCA). He has an MBA from the Darden School at the University of Virginia and a Bachelors degree, with honors, in Natural Sciences from Oxford University.
In this interview, Robert reveals his personal experience in venture investing over 30 years, and how he sees the venture industry evolving. Robert states that you must be analytical to be a VC, but you don’t have to have any specific background. He feels the key to successful venture investing is finding opportunities and companies that are addressing a market that is about to explode, but there is no mainstream knowledge of the importance or growth prospects for that market. Robert also feels that leadership is essential for being a good VC, and that this is critical for working with management teams, CEOs of his companies, and on the boards of directors.
We discuss the historical perspective on the venture industry where $100B was raised by VC firms for investing in the year 2000, where more recent years are in the $20B to $30B per year category.
We discuss the market dynamic for “exits”, where the IPO market is no longer a viable option for most companies due to the “decimalization” of trading, or the moving from fractions to decimals for trading spreads, that reduced broker commissions, and government regulation like Sarbanes-Oxley. Viable IPO candidates now need to have significant revenue or explosive growth to garner investment banker and public investor interest.
There are still startups that are huge winners, but there are fewer of them, and most are in California, with the bulk being in the San Francisco Bay area and Silicon Valley. A smaller percentage of venture-backed companies are successful, which means that overall venture returns are down from historical levels.
Robert explains that venture capitalists look at Return on Investment (ROI) as opposed to Discounted Cash Flow (DCF). He was also involved in lobbying efforts to the US federal government as a director of the NVCA, and he shares some stories of that experience.
We hope you enjoy this interview and find it informative and entertaining. As always, we welcome your feedback and comments.
This is Patrick Henry, CEO of QuestFusion, with The Real Deal…What Matters
This article originally appeared in The Consulting Masters.