Blockbusters to Unicorns: Parallels within Entertainment and Venture Capital
About six months ago, roughly one month into my role at Fika, I sat down to write a reflection piece on taking a people-first approach to investing as a throughline between my (previous) career in entertainment and my new career in venture capital. At the time of that article, I noted that I had barely dipped a toe into the venture industry. I was a starry eyed, soon to be MBA graduate with my dream job in hand and a whole new life ahead of me. Fast forward to the present and I’m still a newbie in this business, but maybe with a few more gray hairs. The transition from full-time student back to full-time professional hit me square in the face…and I have fully embraced it.
In my short tenure, I have been pleasantly surprised to discover so many more thoughlines between entertainment and venture. Mike Palank, who, like me, worked in Hollywood before becoming Managing Partner at MaC VC, first pointed this out to me. Before heading off to Berkeley to get my MBA, Mike sat me down and offered me a piece of wisdom that gave me the confidence to pursue venture and something I still carry with me to this day. Essentially, he said that the skill set required to be a successful early stage VC is quite similar to that of an entertainment manager or agent. As a manager/agent, your job is to find the best writers, directors or actors and sell them on what is uniquely valuable about yourself and how you are the best partner to help them launch and sustain their career. The same applies to venture, you are just working with entrepreneurs and technology instead of writers, directors or actors with screenplays and pilots.
With that in mind, I feel that it’s worth highlighting some of the overlapping nuances of these two industries. I will caveat by saying this is my beginner’s perspective — my toes may be fully submerged at this point, but I am not even knee-deep.
Networking
Let’s start with networking — something I love and have embraced throughout my professional career. Some people cringe when they hear the term “networking’’. They immediately think of superficial, transactional exchanges purely motivated by the hope of a future business exchange. Honestly, this definition of networking makes me cringe too. What I am talking about is relationship-building; the formation of a true connection grounded in empathy and trust. In entertainment, that’s how I sought to build my personal brand and thus the ethos of my company. It was a multifaceted exercise not limited to industry peers at studios, production companies, agencies, etc. but included lawyers, brands, advertisers, and perhaps most importantly, talent. The best screenplays, pilots and projects almost always came directly from other writers and directors. Thus, building meaningful, personal relationships with these individuals, regardless of whether they were a client or not, was my gateway to proprietary deal flow.
In venture, the same applies. We just call talent “entrepreneurs’’. I heard it over and over for two years in business school, and through various internships, that obtaining and sustaining proprietary deal flow is what separates the winners from the losers. All of that is made possible by networking. At Fika, I am fortunate enough to have incredible role models who are dedicated relationship-builders and whose efforts have elevated the Fika brand.
Deal Sourcing & Closing
It may sound cliche, but having a stellar reputation trumps perhaps all other things on the path to success in both entertainment and venture. Why? Because these two industries, while commanding macroeconomic power and wielding massive societal influence, boil down to tight-knit inner circles. To be successful, it is not enough to just know all of the players — they have to trust you. And to gain their trust, you must have a mindset of giving rather than receiving. Newly minted entertainment managers/agents and VC associates typically take on the responsibility of deal sourcing. Establishing a flow of quality deals is predicated on one’s ability to break into the inner circles by demonstrating an ability to pick and share good deals. Nothing is more impressive than someone with exceptional acumen and instincts who also has the foresight to share relevant and exciting deals. This is what builds bridges and long-lasting partnerships. Both entertainment and VC are industries of reciprocity, and baking this into the fabric of one’s personal and organizational brand creates a flywheel of knowledge sharing and dealmaking.
But it is not just about finding and sharing great deals, you need to win the best deals too. In entertainment, I playfully referred to this as the courtship of talent; a weeks, months, even years-long process of meetings, calls, brainstorming sessions, dinners, etc. Ultimately, it came down to two things: building trust and a common language, and adding value wherever I could before anything was signed. In venture, the same strategy applies to cultivate goodwill and stand out from other investors. Whether it be a customer, new hire, or fund introduction, or taking the time to offer advice about their business plan and go-to-market strategy, putting in the effort at the earliest stages is what leads to deal wins.
Aligning on Values
During my time as an entertainment manager, the single most important thing I looked for in the writers and directors I signed was humility, openmindeness, and an impassioned thirst for personal and professional growth. The reason these traits were table stakes was because my clients were an extension of me, and their actions and behavior reflected back on me and the reputation I sought to build in the entertainment community. These relationships would last years, so it was critical that we saw eye to eye.
The founders that investors back are the lifeblood of their businesses. Like entertainment, the partnership between investor and founder can be years, even decades. As some like to quip, these relationships often last longer than most marriages. Building a great fund and sustaining an indelible reputation in the marketplace is predicated on backing not only the best innovators, but the best people.
At Fika, we use the term founder-fund fit. While we often hear the terms founder-market fit or founder-product fit, founder-fund fit is perhaps even more important in building a portfolio of exceptional companies and founders. The team at Fika has been built by and with individuals with low ego and high empathy. We take a roll-up-your-sleeves approach to investing and work hand-in-hand with founders. As such, we believe that the founders we back need to exemplify these same values.
Operationalizing the Vision
It is one thing to find amazing talent and convince them that you’re an amazing manager. It is another skill set to keep your foot on the gas pedal and support your founders/creatives once they’ve signed with you. In entertainment, we call this development and packaging. Once a client signs with you, the next steps are to further develop their ideas (screenplays, pilots, pitches) and then take their projects out to the town and “package” the project with a director, producers, cast, financiers, and distributors.
In venture, the best fund managers do a strikingly similar exercise. If they invest in a startup, say at the seed stage, the next steps involve the development of the business — whether it be go-to-market execution, hiring acceleration, or financial planning and analysis. The mission is to be an additive resource, sometimes even a pseudo-employee, to help scale the business and get them to a Series A, when a VC activates their rolodex of contacts to help the company close the round.
Conclusion
In spite of the high degree of variance in the type of domain expertise required to do these roles effectively, especially the technical expertise required for many venture capitalists, similarities abound between the role of an entertainment manager/agent and a venture capitalist. Michael Ovitz, famed entertainment agent and founder of Creative Artists Agency (CAA), reflected on his transition from the entertainment world to investing on the Acquired Podcast. He said, “All of the training I had as an agent has led me to a career in the digital world. That’s fantastic because what am I doing? I’m packaging. I’m putting young founders together with money and distribution. Nothing different than I did for 35 years. It’s all the same, except I’m doing it with smarter people.” Well, I am not going to weigh in on what smart means, but I will agree with Mr. Ovitz that I am consistently floored by the sheer intellectual horsepower of founders that I meet.
I am incredibly humbled and grateful to do what I do and to be a part of such a stellar team at Fika. The opportunity to not only work with and learn from my colleagues and peers day in and day out, but to also collaborate with such talented founders through good times and hard times, energizes me beyond comprehension. For now, it is time for me to put my head down, build my network (relationships!) and brand, and partner with some amazing founders.
