Sunday, December 3, 2006

Contempt, eh?

A lot has already been written about Guy's post, so I'll try not to echo too much. But it is worth mentioning that, while most of the readers commented on the insightfulness of the VCAT (styled after this quiz in Cosmo…), I can't help but think Guy's post is a little behind the times. No, no, I am not saying 25 year olds should be calling the shots at VC firms and casting a vote on investment decisions. But I don't think it is fair to belittle all the early 20's enterprising applicants who are interested in VC jobs. And it is Certainly not fair to advocate treating those people with "contempt".

For those who haven’t read Guy’s post, his argument, oversimplified, breaks down into 3 premises:

  1. Young ppl are motivated by dreams of grandeur to try to get into VC
  2. Successful VCs have x / y / z qualifications ("Venture Capital Aptitude Test")
  3. Young people don't have enough (if any) of these qualifications

Ergo: It is ridiculous that young people are trying to work in VC.

In essence, Guy’s VCAT is supposed to be a sobering wake up call for us youngins who lack experience (can't say I've ever been “kicked in the groin”), and are aiming for the VC scene to be a part of the sexiness associated with the industry -- corporate jets and all.

But this does two things. 1. It unfairly clumps every young person’s motivation for getting involved in VC to one motivation. 2. It assumes that a pre-MBA’s job is equivalent to a GPs job. Neither is the case.

To the first point, there are a good number of young people out there interested in VC for the broad exposure to entrepreneurship one gets with the aim, either to cross over, or leverage that experience in some other industry. Heck, there are already some great examples of former pre-MBA VCs crossing over to entrepreneurship (Charlie is case in point). My guess is that Charlies’ experiences at Union Square Ventures help inform his day-to-day at Oddcast. To the second point, pre-MBA posts are (for the most part) jobs heavy on the sourcing and researching, light on the tie-breaking votes and corporate jets.

Guy goes on to write: "entrepreneurs should view any young person who opted for venture capital over “real world” experience with contempt." I am sure Guy didn’t mean it as strongly as he wrote it, but ouch. Guy, what did you hope to encourage by that proclamation?

Contempt clearly doesn't help anyone. I agree with Guy’s claim that no pre-MBA should be calling you, expecting to know what it is like to be running your business as well as you do. Nonetheless, as funds gorge themselves on LPs’ wallets, more and more money is out there, needing to be put to use. Increasingly, to adapt, VC firms are supplementing their inbound deal flow with outgoing calls to make sure that there aren’t some good deals passing them by. Chances are, if you are an entrepreneur behind a successful start-up, you have been called by a twenty-something working for a VC. The increasing presence of pre-MBAs in VC is less “additional proof that we’re in a bubble”, and more a sign that the VC organizational structure is changing -- for better or for worse.

As an aside, I think this trend is great. Not just because it means that I get to work in VC (Whoo hoo! Corporate Jet!) but because I think it helps open the playing field for entrepreneurs who don't belong to the "old boy's network", namely women and minorities. Obviously there is still a long way to go here, but every little bit helps!


Anonymous said...

Sarah, that was a terrific response to Guy's VCAT rant. I generally agree with Guy most of the time and just finished reading Art of the Start... but his rant against 20 somethings getting into VC is a bit absurd.

As you pointed out, Charlie's experience working at a VC then going to a portfolio company is a great example of how you can leverage some time at a VC...

Anonymous said...

nice post. glad to have you posting.

Anonymous said...

Welcome to the blogosphere. Guy's latest list is at best a grab for buzz (like most of his lists) and at worst a defensive attack at a world that is most easily grokked by net natives, people of the generation he attacks. Great post.

Anonymous said...

dido on the comments above. i don't know much about Guy, but I agree that you have to take each person according to his or her perspective and experience -- financial or not -- when considering his or her abilities to contribute to the venture process.

Anonymous said...

The curse of Guy Kawasaki
The Apple guru and startup investor, chose an unfortunate moment to roll out his aptitude test for venture capitalists. Since Guy Kawasaki launched the online quiz on his popular blog about startup culture and investing, let's see what happened. On his site, the tech maven lists directorships of three tech ventures. Growth at Simplyhired, the jobs search engine, appears to have stalled in 2006. Filmloop, a photo slideshow service which competes with Slide, laid off most its staff during the holidays. And Bitpass just discontinued its micropayments service. Kawasaki's remaining external directorships are on the boards of a Palo Alto Montessori school, and the Hawaiian Islands Ministry. Oh, and here's a bonus factoid for superstitious readers. The title of the web page on which the startup evangelist's jinxed portfolio was listed: Guy's Golden Touch.

Anonymous said...

Just wanted to say that I refer many people to this post (and Seth Levine's post on How To Get A Job In Venture Capital) when asked about careers in VC, how to land a junior investment professional position, etc.

Am glad to see another female VC blogging, too!

Unknown said...

Hey SG - Thanks so much for the comment (and for pointing ppl in my direction!). Great to meet you. I just tried to track down your blog, but it seems anonymous. Where do you work?