VC Talks #1: Yigit Ihlamur, Vela Partners

This is the first episode of the VC Talks which is a short interview series that shares the wisdom and experience of Venture Capitalists and investors with just a few short questions.

I’m very excited to have Yigit Ihlamur for the first ever episode. Yigit is the co-founder and general partner of Vela Partners.

Vela Partners is pioneering an innovative way of investing in startups, which is called Ventech (Venture technology). Vela is an AI-enabled data business, collecting insights about markets, companies, and people. Then it leverages these insights by making better investment decisions and by helping improve the performance of its portfolio.

Let’s dive into the conversation with Yigit.

Efe: What is your superpower?

Yigit: I am effective in helping. This strength makes our team and portfolio companies stronger.

Efe: What was the biggest challenge you faced or the biggest risk you took in your career? How did you overcome it? How did it pay off?

Yigit: As a product-focused operator, focusing on a service business like venture capital was the biggest risk. The long-term risk was that I could lose my competitive edge as an operator, who loves working on the weeds of data science, engineering and product management.

My partners and I overcame this risk by making our company a product-led service business. This transformation paid off well, because engineers and product managers do not want to be in the business of services; they want to build self-serve products. On the other hand, service-oriented operators do not want to spend time building a product. We found a promising gap in this market.

Efe: What do you do when you feel like you are not making any progress or you feel overwhelmed by the challenges?

Yigit: When you don’t know your long-term path, you get overwhelmed faster. When I was exploring various ideas after leaving my full-time job at Google, I was easily getting overwhelmed and frustrated by the slow feedback loop.

The 6 months of exploration period helped me set my long-term goals. I realized that I wanted to work with amazing people, learn every day and be in the center of innovation making a positive impact on society. Once I noticed that, I decided to be in the business of funding innovative businesses for the rest of my life.

Once I had that long-term oriented view, I stopped feeling overwhelmed. Deep inside, I know that our team can overcome any challenge and make the right steps to evolve our business.

Efe: What is your biggest problem/challenge nowadays?

Yigit: Coronavirus is top of mind. First off, we hope that everyone remains safe and the pandemic gets under control as soon as possible. This uncertainty slows various decisions, which will impact the pace of innovation this year.

Efe: What is one thing you expect from or you are most excited about the next decade? (Could be related to business, technology, entertainment, health etc.)

Yigit: The pace of innovation is making me most excited. We’re in the era of rapid growth of collective intelligence and social impact awareness around the world.

The world is going to have more entrepreneurs with distributed and small teams building successful and social impact-aware businesses.

Efe: What advice would you give to a new graduate or an experienced professional who wants to become a VC or find a job at a VC firm? How can they start adding value to startups and VCs?

Yigit: First off, you need to ask why you want to be a VC. What is your motivation behind? Is VC the right path to achieve that long-term career goal? You must have clarity about your goals, because VC is a long path.

I do not recommend working at an early-stage venture capital firm right after college. You must wear an operator hat in order to build rapport with the founders and understand the businesses you evaluate when there are no numbers. Without an operator role, I do not see how one can be a successful early-stage investor, because the VC job boils down to getting access to invest by building rapport. If you’re a new graduate and interested in investing, I recommend getting a full-time operator job and start investing in public markets on the side.

Successful entrepreneurs, corporate development or management consultancy professionals have a higher chance of finding a job in a VC firm. Engineers or product managers have a higher chance to find jobs at incubator-oriented or seed venture firms. Program managers would be great fits for accelerators.

I recommend that experienced professionals should put their skin in the game and understand what it means to invest their capital in highly risky businesses before investing other people’s hard-earned capital. Being a VC is a huge responsibility and can be a high stress job. After making 10–20 angel investments, an experienced professional would have a good idea about how to formalize an investment thesis, source, analyze and support companies as well as losing capital. At that stage, the professional would be ready to interview for the VC roles.

The VC business is a typical sales funnel. VCs need to have a wide and qualified top-of-funnel. If you send many high-quality deals, then you’ll be seen as a high-quality sourcing channel. You can have a higher chance of getting a job at a VC firm by building your social capital over time. You can focus your own competitive edge to find highly qualified deals. For example, if you have an expertise in an area (e.g. machine learning), be a thought-leader and source startups from that market. If you are connected in a network (e.g. alumni network), be the go-to-person for any startup coming out of that network.

I’d like to give very special thanks to Yigit for attending the first episode of the VC Talks.

We’ll interview new VCs and investors every episode, so if you’d like to attend or know someone who would like to attend please DM me via Twitter. Also if you enjoyed the VC Talks please follow, comment and share with your friends.