My first decade with Vesuvio Ventures. Some lessons learned.
I just noticed that my company Vesuvio Ventures is celebrating its first decade in business. And yes, it’s true that time flies when you are having fun!
It took me many years to understand our business model and will share some of my personal learnings during our first decade in this post.
I started Vesuvio Ventures as a side project during my earn out and transition from my long-term partnership with Reed Exhibitions. During those days, I was focused on my exit plan doing my best effort to leave “my baby”, a company that I started in 1995 and partner with Reed in the early 2000’s and became fully owned by Reed a bit more than ten years later after a fantastic ride building the largest event organizer company in Latin America. Working with amazing people during those years was an amazing honor and privilege but I was ready for “something new”. I started three companies from “scratch to exit” during a 20 years cycle. My exit with Reed was #3 on that list and I have had another four initiatives that failed miserably during those first twenty years of “doing stuff” as an entrepreneur. Many lessons learned and I was eager to share some of those learning with other entrepreneurs who were starting their own ventures.
In 2008 I was 41 years old and I was working since I was 18 years old in some sort of startup or corporation (mostly during my Apple years) and was ready for some “stop, think and reinvention time”.
I experienced all my middle life crisis experiences, like trying to take a one year off sabbatical, doing an around the world trip with my family, try to learn new hobbies, improve my tennis, and many more things (I actually have a list of things and goals to achieve during my sabbatical) but after less than a year doing those things, I was clearly a bit anxious and ready to “do something new”. And that’s how Vesuvio Ventures was officially launched. My initial company thesis was “advising and backing amazing entrepreneurs who were building real solutions for real problems”. I was not looking to be again the full-time founder or CEO. I did it before, I know how it feels and was excited to partner with entrepreneurs from a different perspective.
Since them, I invested and/or have an advisory role in 54 companies. Ten of those companies failed, I had eight successful exits and 36 companies are active in my portfolio. I would say that around ten of these active companies are looking like clear winners where I should have a fantastic return on investment in the next three to five years.
In any case, I did a couple of pivots on my initial investment thesis based on my own learnings and personal goals. Vesuvio Ventures is not a traditional venture capital fund, I don’t have any external investors/LP’s and this gives me a tremendous flexibility in terms of investment cycle and expectations but also many challenges in terms of having discipline and focus in comparison with more “traditional investors”. I enjoy co-investing with traditional VC’s and Corporate Venture Capital (CVC’s) and along the years I was blessed with many amazing co-investors that complement my skills and network helping portfolio companies to accelerate their goals. As an entrepreneur, investor and advisor, I think that I learned some valuable lessons and I’m happy to share my own mistakes, learnings, and thoughts on this simple list.
Lesson #1. Moving from the “entrepreneurial to investor mindset” is not easy and could be very frustrating
I keep saying that I’m not a professional investor and I don’t think that I will ever be. I think like an entrepreneur and analyze many opportunities from that angle instead of having a “purist investor approach”. If I don’t have a unique bond with founders and if I’m not passionate about the problem that they are trying to fix, I have a real hard time investing time or money. I’m sure that I missed and will be missing many amazing deals but I realized that this will be part of my investment thesis and I’m at peace with that. Life is too short to only maximize profits.
I finally understood, and took me many years, that now I’m not the full-time Founder or CEO and that my role now is more strategic and less granular or operational. I still think like an operator but I try to communicate with the founders as an advisor/investor/mentor and complement their thoughts on a way that I can hopefully add some perspective and help them to take some shortcuts based on the hundreds, or thousands, or millions of mistakes that I did on my professional career.
Lesson #2. I enjoy more investing on a “company building or venture studio” model instead of the traditional early stage investor formula.
After 20+ traditional angel investment deals, I realize that based on my lesson #1 and the approach that I have with many of my portfolio companies I was inclined to “do fewer deals but more involved”. I want to keep 20–25 traditional angel deals on my portfolio and when I have an exit or write off I plan to continue to invest in this category but I definitively have more fun “building” than “investing”. I was fortunate to learn company building with amazing entrepreneurs and I honestly believe that this model is a very efficient formula when all parties involved (founders, advisors, and investors) complement each other and have strong alignment on their company expectations. This is easy to say but extremely challenging to achieve but after 7 company building deals on my portfolio during the last decade, I think that I learned some valuable (and many times though) lessons.
Lesson #3. The intersection between corporate innovation and startups is where I want to play.
I invest almost 50% of my time consulting and co-investing with big corporations who are looking to partner, invest or acquire startups as part of their innovation goals. I consider myself a sort of translator between the Founders and the Corporate executives and I think that I learned both languages along the years.
After almost two decades doing corporate venture capital on both sides of the table (as the entrepreneur receiving CVC and as part of the CVC team) I think that there is clearly some magical opportunities leveraging the best of both worlds and helping founders with corporate expertise, distribution channels, validation and capital and, on the other side, helping corporations to move faster and learn from brilliant founders and their teams on how you can get “shit done” fast with limited resources and against all odds.
Lesson #4. It’s all about the Founder/s
After many years of doing M&A in my previous company, I get used to analyzing traditional metrics related to acquiring and merging companies in search of efficiencies, and accelerating growth. When I started Vesuvio Ventures and came back to early-stage investing I realized that most of those learning from my previous life were now basically irrelevant. I use to say now that I “only” invest in amazing founders, regardless their idea (since I know that most likely it’s going to change/pivot at least a couple of times) or the market size, competitors and many other traditional things that any investor should explore. In the end, if you invest in the right founders they will figure out the rest. Early stage investing it’s very long journey (7–10+ years) and you are going to spend a lot of time with these founders and you better admire them and be able to enjoy the ride.
Lesson #5. It’s not a traditional job. It’s more like a vocation or calling.
I was fortunate enough in order to achieve my financial goals early in my career. Don’t get me wrong, I enjoy (a lot) when I see my bank account going into the right direction but I decided that I would not compromise my vocation (“advising and backing amazing entrepreneurs who were building real solutions for real problems”) because of maximizing the return of my investments. Time will tell if this is a sustainable strategy but I’m convinced on the fact that my lesson #4 (It’s about the founder/s) and building real solutions for real problems it’s what really matters. If I understand those problems and I’m passionate trying to help to build those solutions and I’m lucky enough to identify the right founder/s the following decades at Vesuvio Ventures should be lot’s of fun, learning and yes, a nice return of investment as well :)
If you are a big corporation looking to innovate investing, partnering or acquiring startups or if you are an amazing founder ready to build great solutions for real problems please reach out. Hopefully, we can have fun, learn and do great business together during the following decade at Vesuvio Ventures.
Originally published at Marco Giberti.