A Venture Capitalist’s Vernacular
David Crow, an experienced start-up founder, investor and advisor spoke to Fellows on raising venture funds and on life as a venture capitalist.
“We keep talking about Venture… why? Because it’s the fuel for the fire. It allows companies to grow”
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half (John Wanamaker)”
“We try to get all the start-ups to express the customer pain they are solving”
“Execution is very simple, it is where you test your assumptions”
“Entrepreneurs like valuation because it’s a nice scorecard, you can say ‘I did better than you’”
“You know you got it right when the investor says they paid too much and the entrepreneur thinks they should have got a little more — it’s all an art”
“Primary way VCs are going to make money is through M&A. If you raise venture capital you need to be prepared for the inevitable, VCs are going to sell your company”
“If you don’t want to sell your company then don’t take VC money”
“In most venture funds, one company pays back the whole fund”
“A good idea is not about saying awesome really loud”
“Congratulating an entrepreneur for raising money is like congratulating a chef for buying the right ingredients”
“Raising money is the start of the really hard stuff — now go execute and generate 15% month-on-month growth, aim for 2.5x growth in less than 18 months”
“Shopify is unique, it’s a Canadian Unicorn, so it’s a Narwhale. Hat tip to Brent Holiday at Garibaldi Capital”
“When we look at start-up metrics, I talk about three things: engagement, distribution, and monetization… Distribution is the primary thing to think about.”
“Everyone wants to be in consumer tech but there is a lot of untapped pain people have not solved over in healthcare, education and government”
“Create more value than you extract”
David continually came back to three questions that VCs use and that you too can use to assess a business and that serves as a good summary here:
1. Is this a good idea?
2. Is this the team to pull it off?
3. How can I make money?
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