The Move from Entrepreneur to VC
I’ve officially been a VC for four weeks now. The timing is a bit odd as it’s fallen somewhat within the holiday season, so I can’t say that I have a great feel for what the rest of my career will be like, but it’s been four weeks just the same. In this time, one of the most frequent questions I’ve received is why I made the switch from a being a lifelong entrepreneur to becoming a venture capitalist.
By way of background, I’ve been part of the founding team of four separate companies. I started my career at Anderson Consulting and lasted about 3–4 months before joining my friends Brad Birnbaum and Alex Bard at eShare Communications. What started out as a recreational chat and bulletin board company in the early Internet days (it was 1996 and our customers included Lycos and Geocities) ended up being a customer service platform. After eShare was sold to a public company in 1999, I was part of a founding team at eAssist Global Solutions that raised 72 million dollars during 1999 and 2000 to provide Enterprise customer service solutions as an ASP (Application Solutions Provider — now referred to as SaaS — Software as a Service). There were lots of ups and downs (ups included employing over 300 people, having offices in more than 5 cities, building a terrific product, etc. while downs included abandoning our IPO after having an incredible tombstone and eCRM as our ticker symbol) but we ultimately had to sell the company for pennies on the dollar after slogging through post the dot com bust. The next company, Goowy Media, was a change from enterprise customer service to consumer Internet with a “better” email client in the browser — before Gmail was on the scene. We raised money from Mark Cuban (in 2005), realized that the initial concept wouldn’t fly once Gmail came out, and ultimately pivoted into a widget distribution and analytics company that was eventually acquired by Aol. Finally, in 2009, my friends/co-founders and I went back to customer service with a social twist — and a push into SMB so that we could be much closer to our customers than our previous lives in enterprise — with a company called Assistly. We were again fortunate enough to be funded, built a phenomenal product, acquired some of the best customers around and in 2011 were acquired by Salesforce, where I worked until just this past month.
That rundown covers 18 years from 1996 to 2014. Although I’ve worked for a few large companies as the result of acquisitions, it’s safe to say that the majority of my career has been spent building companies from the ground up. With a bit of humility, I can say that I’ve been more successful than most in the world of startups. And truthfully, it’s much easier to build upon a successful history. It’s easier to attract funding. And co-founders. And employees. And customers. So why hang up my cleats now? What led me to try another path?
I’ve had the privilege of being an Angel Investor as part of B Squared Ventures with my best friend and partner, Alex, for the past 3 years. We’ve invested in over 30 entities, at least 20 of which can be considered traditional tech startups — the rest are comprised of more eclectic companies including restaurants, real estate funds, venture funds — and perhaps a couple even more eclectic than that. Of the 20+ that can be considered traditional, I’ve had the opportunity to meet and work with incredible people including Scot Chisolm (Classy), Brandon Levy (Stitch Labs), Mark Lovas (Trumaker) and Joshua Reeves (Zenpayroll). Outside of investments, I’ve also had the opportunity to work with entrepreneurs like Noah Auerhahn (founder and CEO of Extrabux, acquired by ebates) and Joseph Mahavuthivanij (founder of three startups since I’ve known him).
All of the opportunities I’ve had with these companies have been remarkable in their own way. I’ve enjoyed every minute I’ve spent with these entrepreneurs and the companies that they founded, but I realized that I wasn’t spending enough time with them. Our conversations were too high level and I didn’t have enough time to drill in and ask the hard questions or provide the deep insight that would really help them take the next step. I realized that I was itching for the chance to work with lots of highly intelligent people across a wide range of companies. It almost brings me full circle to what I envisioned consulting might have been like, except that now I actually have the experience and knowledge to truly make a difference.
As exciting as the prospect of being able to work with great individuals and companies was, I also wanted to improve my quality of life. I’m not expecting to work any less as a VC — and especially not one that is in essence a startup itself — but I am expecting to work a bit more on my terms, with a bit less structure and a bit more fluidity.
In the first four weeks, I’ve spent a lot of time getting up to speed on our existing portfolio companies (many more to meet) and I’ve actually led a couple of our investments (one closed and another in process). And I’ve been a part of our fund raise — we still have a ways to go although we’re gaining steam and moving towards our goal every day.
It’s too early to tell, especially given the holidays, but four weeks in, I’m loving this new chapter. Next post — why did I choose to join Social Leverage and what’s my role there?
Originally published at www.garybenitt.com on December 30, 2014.