Startup and VC Advice from Adam Kalish, GP at Lux Capital
Dear Readers,
Welcome to another edition of PIE, where we interview the brightest entrepreneurs and VCs from Princeton and beyond. This issue’s featured founder is Adam Kalish, General Partner at Lux Capital. Adam plays a crucial role in maintaining long-term relations with investors and interacts frequently with entrepreneurs as he advises several companies. Before joining Lux, he was a Director at Everest Capital — a leading hedge fund managing several billion dollars. Before working at Everest Capital, he was a part of Quellos, a billion-dollar investment firm. Let’s hear it from Adam on his venture capital journey!
1. How has your journey with Lux differed from that at Everest and Quellos?
Everest and Quellos were both well-established firms with an existing client base and multiple offices. When I joined Lux, we didn’t yet close on our first fund. We were sharing an office with four other firms and we were literally wearing the same suits every day. We were as much a startup as the companies we were investing in. We’d travel and share three to a room, take buses and stay with our parents or friends to save money where we could. And we loved every second of it. I look back on those times as some of my fondest memories at Lux. We never doubted for a second that we wouldn’t make it. We also had supreme confidence in each other and the model. We knew we’d make it, it would just take time.
2. Could you describe how your experiences at University of Miami and/or University of Westminster shaped you to break into VC and how they influenced your investment framework?
I was intentionally a triple major at University of Miami in English, Film and Economics, knowing that it was highly unlikely my original goal of being a film producer would work out. I think that framework of assessing risk and always having a backup plan has served me well as a venture capitalist. I’ve often said that the movie business and the venture industry are very analogous. At the end of the day, you are selling a story, a vision and trying to get customers to believe in it. You need a star to play a leading role in a movie just as you need an entrepreneur to lead the vision of a startup. When fundraising, both filmmakers and startups need multiple sources of capital. A startup needs to release a product people want to buy just as there needs to be a film people want to see. Press, recruiting, branding, etc., the list is endless and I got my formative training in all of this at the University of Miami.
The University of Westminster, while a great school, was more about fun and exploration. Seeing the world and learning first-hand that the principles I was learning domestically could be applied internationally, and reinforcing that the best lessons are taught outside the classroom.
3. For students who are passionate about going into entrepreneurship/VC, what are the top activities, books, research areas, anything really, that you would recommend them doing while in college to best prepare them for this career?
The number one thing I’d recommend they do is work for a startup. Working at a big established company in any industry, your experience will be siloed, but when you are at a startup you’ll wear dozens of hats a day. There’s nothing like it. But to every student reading this article, I’d recommend you start a company, NOW. You’ll never have the time, freedom or lack of responsibility like you will in college. If you have a big idea, there is no better time to go for it than right now. With university resources and fellow students available to work alongside, your initial costs are nil.
If there’s one book I’d recommend to anyone interested in venture, its Delivering Happiness by Tony Hsieh, the founder of Zappos. It’s incredible and you’ll read it in a day.
4. What are the advantages/disadvantages of being a specialist investor compared to a generalist, and vice versa?
At Lux, everyone is a generalist. If you are specialist, you may miss the next great deal or cycle, or someone might not show you something thinking it’s not for you. We like to say funnel wide, filter deep. Seeing it all doesn’t mean you have to invest in it all.
5. What is the biggest challenge you faced while maintaining relation with investors?
Venture is different than other asset classes in that it’s a ten-year plus investment, so you constantly need to remind yourself of one word: patience. Your investors will be with the fund for a minimum of nine years, so you need to maintain a long-term grounded view, no matter how hard it is sometimes.
6. What is a common mistake that you think entrepreneurs make when trying to raise capital?
I think some entrepreneurs forget that many VC’s are entrepreneurs themselves and so they know how hard it truly is and have often been in their shoes. Don’t say you were up all night working on a presentation if you weren’t or that you made 100 sales calls if you didn’t. Inauthenticity shines through in fundraising, recruiting or selling your product. It’s OK to be honest and say how hard it is, but don’t lie. It will come to bite you in the ass ten out of ten times.
Bill Conway, the founder of Carlyle, put Lux in business and told us this simple phrase which we live by, “It takes 10 years to build a reputation but only 10 seconds to lose one.”
And that’s it for this issue! Feel free to reach out to me for any questions or comments.
Find out more about Lux here.
For more interviews of other leading founders/VCs go here!
