There is nothing ambiguous about the story of Venture Capital. It’s a rich kids’ thing. Started by the Rockefellers in the 1960s, Venture Capital has since (rather understandably) been a domain of ultra-rich, super-successful ex-founders and corporations with deep (deep) pockets.
Makes sense, right? So let’s recap why: Making good investments requires a) money, b) (some) financial literacy and c) experience. The Rockefellers had the a) covered quite well, thank you. The Andreessen(s) and Thiel(s) of this world probably tick off both a) and c), and the Corporate VCs surely must be able to find all of the above somewhere in the bowels of their multi-tiered organization.
But what if I tell you that it’s all a bit different?
A study looking at top 100 US Venture Capitalists found that neither the years of experience nor whether they had founded a successful company in past matter. Indeed, many of the highest ranked VCs came to venture from a regular job.
It also seems that contrary to the conventional wisdom, ex-entrepreneurs are not good VCs. Over-confident in their ‘one true way’, they may have a tendency to be forceful in the boardroom.
But if experience doesn’t matter, and financial literacy can be bought, then what is it? What is the magic factor that makes a good VC?
What that same study finds is that best VCs are able to generate strong deal flow. Simply put: the more great opportunities you can go through (and turn down), the higher are the chances that you’ll find the next Facebook.
The single most important factor in having access to great opportunities is one’s public profile. Influencers and celebrity investors have a clear advantage, but these qualities don’t necessarily coincide with wealth or seniority. (Although, yes, they very often do.)
Pocket Sun and Elizabeth Galbut, the twenty-something year old founding partners of SoGal Ventures attained a celebrity-like status precisely because of what they are: girl millennials starting a VC fund. Championed by media, they have built a strong community of people, who fund and support them along the way, also giving them information on hundreds of interesting investment opportunities.
Venture Capital is not a bottom-up investing. Good accounting, a great projection model and an elaborate go-to-market strategy often say little about the startup’s growth potential. It is hard to measure vision, energy, soul, excitement … . In some respects, VC is everything but bottom-up investing. It is about understanding the Zeitgeist, and making bets on the potential of people with not much more than a powerpoint.
Yeah, Stupid! … VC From a Coworking Space.
Before you sigh, remember that there were hedge funds launched from a dorm room. I rely on that same proliferation of knowledge and information in the age of internet that allowed Luca Lin, Christina Qi and Jonathan Wang to start a hedge fund.
Before bardiventures, as a consultant at PwC, I have worked on tax projects for multinational corporations, researched medtech companies in Switzerland for a family office client, and worked on the project of selling a bank; I have co-founded a startup, and worked in a Russian bank (Sberbank).
I am blessed to start on the verge of a revolution in investing caused by the tokenization. I believe that I have a thing or two to say, and that some may be interested. I also believe that my age, my background (born in Eastern Europe, lived in UK, traveled the world), and my work experience lead me to appreciate diversity and see opportunities where others wouldn’t.
To steal the words from the SoGal founder, Elizabeth Galbut, “…I may not fit the norm,” but I am a Venture Capitalist.
bardicredit, the initiator of bardiventures, and the turnkey fund tokenization consultancy, is a member of the Alternative Investment Management Association (AIMA), a global association of hedge funds, private equity and VC funds with more than $2 trillion under management.