Both Sides of the Table

I wrote this on my flight home from f.ounders & web summit in Dublin, Ireland late last year. I think I was too hung over to finish it, hit publish and move on. So here is attempt two now that the alcohol is mostly out of me.

The Magic of the Irish.

Scenes from my counter-top on my last night in Dublin. I recently returned from a 5-day visit to Ireland, my first time back in 10 years and the start of what I hope will be a more regular travel schedule there. Between 1995-2002 I visited often – especially since I founded my first company there.

My trip was scheduled around the annual Web Summit and the f.ounders conference, both of which have become the hottest must-attend event in Europe and rivaling any great conference in the US.

The roster of speakers was vast and just off the top of my head it included the founders of DropBox, Box, WordPress, EverNote, TrueCar, HootSuite, Charity Water, DataSift, Indiegogo, Huddle, oDesk (and many others) plus the usual cast of characters such as Robert Scoble, Gary Vaynerchuk, Dave McClure, Ben Huh, Shak, Shervin and many others. There were senior members from Facebook and Google.

Oh, and of course Bono popped by for a little while.

It was the best 5 days of networking I spent last year. It can’t be underestimated just how influential hosting such an event can be on the future tech economy and jobs in Ireland. We heard first-hand just how close it was that Facebook had considered locating its headquarters in Switzerland and how the Irish rallied and now host more than 400 jobs locally and growing.

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Tom Perkins is one of the founding members of the venerable venture capitalist firm Kleiner Perkins. He just had his Mitt Romney moment and his name will forever be etched in the collective consciousness of the tech community for this terribly insensitive and tone deaf letter to the Wall Street Journal.

The headline of Mr. Perkins letter to the WSJ?

Progressive Kristallnacht Coming?

“I would call attention to the parallels of Nazi Germany to its war on its “one percent,” namely its Jews, to the progressive war on the American one percent, namely the “rich.””


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Picking a VC is hard. You don’t really have much to go on to decide who would make a good fit. Reputation of firm? Of partner? Deals done in your industry? It’s a bit of all of these.

I had an enjoyable conversation this morning with a young team straight out of college this morning and they were calling to ask advice on how to approach fund raising (angels vs. VCs, how to select a VC, etc.) and I realized that without years of experience it is tough to answer this question.

So I thought I’d write about out with what I would look for in a VC knowing what I know now and why.

Most VCs are book smart. It’s insanely competitive to get into our industry so most have degrees from institutions like Stanford, Harvard, Wharton and University of Chicago (blatant plug ;-). Smart is simply not a differentiator. In fact, book smart can be a negative. The last thing you want is a know-it-all telling you what to do when they are at 50,000 and haven’t had to deal with your exact circumstances.

I call them “VCs Seagulls.” (you know … fly in, shit on you and then fly away).

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In my recent post “Why Am I So Lucky? Why You Need to Be Sure You’re Not the Sucker” I talked about how VCs (or other investors) get deals sent to them and how to interpret a referral.

I tried to make a simple point: People have motives when they send you a deal. Sometimes those motives are positive (they really want the chance to work with you, they think you have unique skills) and sometimes they are less positive (their first-tier of “go to” referrals passed on the deal, they don’t want to write another check themselves, etc.).

As I said in the post, I really appreciate referrals and I take meetings introduced to me from a wide variety of people. I simply wanted to make the point that if a deal referral seems “too good to be true” it probably is. If the deal is from out of your geography and/or out of your focus area or a deal is being referred by a well-know investor who normally co-invests with similar syndicates – at least ask yourself, “Why am I so lucky to be getting this call.

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I’m a cynic by nature. And I think it pays to be so. I sometimes wish I were an unbridled, happy-go-lucky, assume-the-best-in-everybody sort of chappy. Sadly, I’m not.

You know the old Groucho Marx saying, “I would never join a club that would accept me as a member.” I always loved that line. So whenever I get a deal sent my way that is from out of town and seems amazing but seems almost too good to be true, my first thought is always, “Why am I so lucky?”

It’s a standard line I use at our partners meetings.

It’s not that I lack confidence. I’m usually accused of the opposite. It’s just that I never want to be The Sucker at the Table.

I got a call a few years ago from a well-known investor up North. It was the first time he had ever called me. Their firm is one of those that you think of when you think of Silicon Valley. I didn’t remember getting the calls on all of his super big, high profile deals.

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