You might have noticed we just raised a new fund, so this seems as good a time as any to reflect on my first year and a half with Accel.
When I came back to Europe, I pulled my kids away from Boston, initiated a divorce in the middle of the move and ended up in London alone and frankly a bit broken. Eighteen months on, life has moved on and so have I. Part of the reason why I got back on my feet fairly quickly is that Accel provided a beacon of light in what was otherwise a dark period for me. There is another beacon of light in my life that I feel I must acknowledge, but that’s a topic for another day (hi H!).
A partnership that works
If there is one thing I have learned in my 16 years in venture is what makes for a strong partnership:
- Equality amongst the partners
- Robust debate and unflinching intellectual honesty
- A desire to work for the benefit of the partnership and not your own
- A culture of hustle and mild paranoia (“what are we missing ?”)
- The willingness to truly trust entrepreneurs and let them rip
Accel has a culture that mixes rigour and ambition in equal measures. When you invest with others, the first thing you realise is that you’re betting on your partners more than you are betting on yourself, and I consider myself fortunate to work with a team of high quality.
The European Challenge
One of the factors that makes European venture investing unique is that innovation can truly come from anywhere, from Vilnius to Barcelona. With partnership teams being by definition non-scalable, that makes for a very unique operational challenge : how do you cover all these regions, keep on top of all these exciting founders and intersect effectively with more than your fair share of winners ?
The answer lies in a mix of methods, from rigorous use of CRM (we track over 7,000 companies !) to data tools like MatterMark or AppAnnie, from keynote speeches at marquee conferences to grassroots events all over Europe. Since venture is a cumulative business, the quality of the network established over time and in particular the support of our founders and our extended network is key in exposing us to the next generation of entrepreneurs early.
My teammate Seth played around with CartoDB and mapped our investments by dollars invested below. As you can see, great startups truly emerge from all the European hubs and we’re now invested in 19 countries, including four companies in Spain (up from… zero a fund cycle ago).
Making money in European venture
One of the benefits of being on the road for a few weeks and meeting all our investors is to be reminded who and what we work for. Most of investors are endowments (who generally help fund access to college), research institutes (who tackle issues like … cancer), charities (who help beleaguered communities) and pension funds (who fund pensions). And yes of course we have a smattering of sovereigns and financial institutions too. It’s a privilege and responsibility to raise money from these folks and it’s our job to make sure they are successful by achieving superior returns.
In the last year investments made out of Accel London led to exit values in excess of $15BN. Combined with the satisfaction of building real businesses and accompanying the entrepreneurs through that journey, it’s nice to be able to send significant flows back to our LPs.
A societal responsibility
One thing that is always on my mind when doing my job is the outsized role startups have on society at large. With the dramatic acceleration of technology-enabled change, we’re bringing on dramatic transformation. Some segments of population, like the miners of old, are seeing their jobs evaporate whilst new modes of work are emerging, as in the on-demand economy. Although I am a firm believer in progress through innovation and of the fundamental human need to “go create”, there is nothing inherently good about technology and we need to be among the first to realise that technological change needs to be met with societal adaptation to protect the more exposed segments of our society, to foster community and to harness progress in a way that is beneficial to us all.
The hustle and the grind
Building venture businesses is hard. Let’s all get back to work.