The Business of Venture Capital. Mahendra Ramsinghani
adds it all up nicely: “The one most important quality of a successful venture capitalist is luck.”26 Arthur Rock, who was an investor in Apple, Intel, and some of the formative companies of the technology era, says, “You gotta be lucky. Everybody's gonna be lucky at some time or another. I was lucky to be lucky early in my career.”27
In the business of venture capital, luck is necessary but not a sufficient condition.
NOTES
1 1. Hank Paulson, 2004 — this was well before the 2008 financial crisis, during which Goldman Sachs was described as a giant vampire squid.
2 2. Sarah Tavel, Adenturista blog, accessed on July 3, 2010, www.adventurista.com/2008/04/vc-pre-mba-hiring.html.
3 3. This bizarre position description was posted on LinkedIn for a family office based in California. I could NOT make this up.
4 4. Gary Rivlin, “So You Want to Be a Venture Capitalist,” New York Times, May 22, 2005, accessed January 13, 2011, www.nytimes.com/2005/05/22/business/yourmoney/22venture.html.
5 5. Michael Carney, “At Benchmark, “Good Judgment Comes from Experience, Which Comes from Bad Judgment,” July 26, 2013, Pandodaily website, http://pandodaily.com/2013/07/26/at-benchmark-good-judgment-comes-from-experience-which-comes-from-bad-judgement/.
6 6. John Doerr, “Kleiner Perkins Caufield & Byers,” in Done Deals — Venture Capitalists Tell Their Stories, ed. Udayan Gupta (Boston: Harvard Business School Press, 2000), 374.
7 7. Robert Nelsen (ARCH Venture Partners) in discussions with the author, December 2010.
8 8. David Cowan (Bessemer Venture Partners) in discussions with the author, December 2010.
9 9. Union Square Ventures, “We're Hiring,” accessed November 23, 2010, unionsquareventures.com/2008/02/were-hiring.php.
10 10. A remora, also called a suckerfish, grows to about three feet in length. Using its suction cups, it attaches itself to a larger fish, typically a shark. The relationship, termed as commensalism, is a one-way benefit to the remora with no distinct advantage to the shark. The remora hitches a ride and feeds off the shark's leftovers. In fact, there is a controversy as to whether a remora's diet is primarily leftover fragments or its host's feces.
11 11. Rahim 2003, The Daily Princetonian.
12 12. Rajeev Batra (Mayfield Fund) in discussions with the author, December 2010.
13 13. Steve Arnold, Jonathan Flint, and Terrance McGuire, “Polaris Venture Partners,” in Done Deals—Venture Capitalists Tell Their Stories, ed. Udayan Gupta (Boston: Harvard Business School Press, 2000), 281
14 14. Source: http://paulgraham.com/startupfunding.html.
15 15. Blake Masters, “Class 8 Notes Essay—The Pitch,” May 2, 2012, http://blakemasters.com/post/22271192791/peter-thiels-cs183-startup-class-8-notes-essay.
16 16. Punit Chiniwalla in discussions with the author, September 2010.
17 17. Society of Kauffman Fellows, “Frequently Asked Questions,” accessed January 13, 2011, www.kauffmanfellows.org/faq.aspx.
18 18. David Cassak, “John Simpson: Reluctant Entrepreneur,” In Vivo: The Business & Medicine Report 21, no. 3 (April 2003), accessed January 13, 2011, www.denovovc.com/press/denovo-simpson.pdf.
19 19. Peter J. Tanous, Investment Visionaries: Lessons in Creating Wealth from the World's Greatest Risk Takers (Upper Saddle River, NJ: Prentice Hall, 2003), 69.
20 20. C. Richard Kramlich, “Venture Capital Greats: A Conversation with C. Richard Kramlich,” interview by Mauree Jane Perry, 2006, accessed January 13, 2011, http://digitalassets.lib.berkeley.edu/roho/ucb/text/kramlich_dick_donated.pdf.
21 21. NEA was then a mere $125 million fund. Today, NEA's committed capital exceeds $11 billion.
22 22. “Boston Scientific Announces Offer to Acquire Guidant at $80 per Share,” news release, http://bostonscientific.mediaroom.com/index.php?s=43&item=376.
23 23. Gary Rivlin, “So You Want to Be a Venture Capitalist.”
24 24. Ibid.
25 25. Jan expressed this at the board meeting of Michigan Venture Capital Association. Trust me, I was in the room when she said that.
26 26. Seth Levine's VC Adventure blog, “How to Become a Venture Capitalist,” accessed on November 23, 2010, http://www.sethlevine.com/wp/2005/05/how-to-become-a-venture-capitalist.
27 27. Source: From the documentary Something Ventured, 2011, Produced by Paul Holland, Foundation Capital.
5 Developing Your Investment Career
“Every discipline has its top 1 percent — how do the top VCs operate? What can you learn from these