How to join the best VC firm

Paul Murphy
Feb 7, 2018 · 6 min read

This month, I made the jump from operator to investor and joined one of Europe’s most successful venture capital funds, Northzone, as their newest partner based in London. I’m thrilled to join the team and start working with founders, but the path to get here was about as non-linear as it gets.

Why Venture? Why London? Why Northzone? It took me a long time to answer these questions, starting with the most important question first.

Why Venture?

About 15 months ago, I started seeing an executive coach, Meredith Haberfeld. With little idea of what to expect, she couldn’t have come at a better time. In one week, a very high profile celebrity partnership I set up for Dots went from amazing to catastrophic, Trump got elected, and we found out our 1-year old daughter had to undergo a very serious surgery. Everything in my life at that moment felt like it was going into a tailspin. She helped me step back and figure out how to deal with everything.

What seems to happen when you see a coach or a therapist for one specific problem, is your attention and focus pretty quickly shifts to other, more fundamental, problems or opportunities. Our weekly conversations eventually moved to longer term professional and personal goals. During this process I realized how much I love learning from other founders and love it even more when I can help them avoid mistakes I’ve made or witnessed. I was already making one or two seed investments per year, and in any given week, met with multiple startups to learn from them or help them where I can. I realized during this process that I cared more about seeing amazing products and companies existing in the world then I did about being the person that built them. If I could help more great products, teams and businesses exist in the world, I know I will be satisfied.

I also came to the conclusion that my own results were highest when I went broad versus going narrow on a very specific problem. The role I once had at Betaworks placed me in 1–2 person teams building exceptional companies like Dots and Giphy, plus six other very different startups, in parallel, over just a few months. I found the breadth of industries we were tackling and the quality of the teams we built to be truly inspiring.

Founders from startups at Betaworks in 2013

Of the folks I consulted before making this move, I was cautioned that operator-investors tend to get bored or frustrated not being able to dig deep into a startup’s business, and let their love for the team or product trump a startup’s investment return profile. Ironically, this supposed Achilles heal of product obsession is what gives me confidence that I’ll be good at this job. While I’m sure it’s possible one’s obsession over product could blind other highly important issues, very few investors take the time to properly understand a startup’s product, and I think that’s a huge opportunity.

Why London?

It took some time and a lot of reflection, but in the end determined investing was the right path for me. When it came time to figure out where to focus geographically, the answer was a bit easier. The beauty of the startup world in 2018 is you no longer need to be in Silicon Valley. I saw this firsthand as the NY startup ecosystem exploded over the last decade, and in many ways believe startups outside of the Bay Area can benefit from multiple significant advantages. Similar growth is now happening at greater scale across the UK and Europe, supported by a developer ecosystem more robust than the US.

My daughter at the Women’s March in NYC

On a more personal level, my wife and I were one of the few serious “we’ll leave the country if gets elected” people out there. For us, it wasn’t a flippant response to an election that didn’t go our way, but actually a fairly logical conclusion we came to during the tail end of his campaign. We didn’t decide to leave because of Trump (he is what he is) but because of the number of people that supported him. There were too many that supported his views, which are counter to the values we hope to instill in our daughter.

Given the magnitude of support he received, I believe it will take decades, not one or two election cycles, for the country to fully recover. While Britain has it’s own version of these problems, there are far fewer than the US. I’m not giving up on the US, and NYC specifically. I worked hard to find an opportunities that allowed me to stay connected to the incredible NYC startup community.

Why Northzone?

There are few funds I know better, having worked with Northzone partners on multiple portfolio companies over the past five years. So the cards were stacked pretty heavily in Northzone’s favor from the beginning, and I knew they wanted me to join, it would be hard for me to pass up the opportunity. They are one of the very few transatlantic funds out there, which feeds perfectly into my network and I’ve known them for years.

But for anyone that’s gone down the venture career path, you’ll know it’s about as big of a career commitment as you can possibly make. In most cases, you don’t find out if you’re any good at investing for a fund cycle (8–10 years). So if you want to go into venture, you are looking at a 10+ year commitment, if you’re any good at it, which is longer than the national length of marriage in the US! Needless to say, it is not a decision to be made lightly, on either side. Knowing this, I approached the market carefully and met with some truly incredible venture firms across Europe to try to find the best fit.

During this process I realized that venture is almost as collaborative between funds as it is competitive. So the discovery process also gave me incredible insight into the firms I could see being good partners when the opportunity presents itself. Having focussed almost exclusively on building teams over the past decade, I knew how important it was for me to find a group of people that I want to work with, and that want to work with me, for a very long time, which led me right back to Northzone. I also happen to like their branding.

So, how exactly do you join the best VC?

My journey made it clear to me that becoming an investor is mostly about timing. It’s something I always thought I wanted to do, but only recently did I feel like I hit that inflection point in my own career where I’ve learned enough to be helpful to a fast growing startup. If or when you decide to go down this path, my only advice is to optimize for the strongest personal fit. This is not the same as joining a company, because you will be measured solely on your individual successes and failures. If you don’t perform but the firm does, you won’t be able to hide in the corner and ride it out. A great startup reputation and strong LP base are table stakes, with a decent list of funds that meet that criteria.

The best fund is the one that feels right on both sides, with a set of people you’re excited to work with for a long time.

What now? Armed with a set of experiences I hope will bring a perspective that founders appreciate, and a relatively long list of things I love (and hate) about all the investors I’ve met over the years, I’m off to go meet great teams across Europe and NYC. Just like the firm I joined, I know I’ll be most excited and helpful working with low ego, optimistic founders somewhat naively trying to solve seemingly insurmountable problems.

This story is published in The Startup, Medium’s largest entrepreneurship publication followed by 294,522+ people.

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