I’ve been thinking about these pieces more and more recently. The first is a scene from a couple years ago. We were in many ways, the lean-start of venture capital funds. Not only did my partners and I not pay ourselves for over a year, but we deployed our own capital into a handful of companies that we ultimately sold to the fund at cost (despite some increases in valuation). We raised money slowly, and just like many of the founders we work with scrambled to get the first few people to really believe in us.
During that time, I maintained a pretty regular schedule travelling to New York to meet companies (3 of our first 7 investments were in New York) and meet potential investors for the fund. The cheapest way to get to New York as most founders will know is by bus. There is a very regular, and ridiculously cheap fleet of busses that travel between Boston and NYC at all hours of the day for $20 or less.
I knew that many of the founders we back would be riding the bus from New York to see us in Boston one day, so it only made sense for me to do the same during our own bootstrap period. It was kind of fun – I ran into people I knew all the time (it’s kind of like the Virgin Atlantic flight to SFO, except… not). We had to do all sort of last minute scheduling heroics when we encountered snow or delays. And one day, after a particularly tiring and depressing trip, I boarded the bus hoping to have a relaxing ride home and found only one seat available next to a pile of human vomit.
It wasn’t pleasant. But it was humbling. I wanted to capture that moment, because I know that all founders go through moments like these. By the way, I wasn’t wearing a suit like the guy in the painting.
The second piece is a big contrast to the first. It’s really hard to stay grounded as a VC. You meet with really talented founders who are pouring their hearts into their companies, and you say “no” or focus on the critical elements of their businesses all day long. It’s really easy to be somewhat condescending when talking about founders. It’s also really easy to make snap judgments about people, or paint them as good or bad in really broad strokes. “That’s guy is a force of nature!”. “That guy is an idiot” “That woman is a great entrepreneur” “That guy is a clown”. Those are all things I’ve said about founders behind closed doors. It’s not great when it slips, and even if I don’t say it, I’m embarrassed to say that those thoughts are in my head all the time. But I really try to temper that tendency. And I’m glad that I have partners that are more respectful than I am, and really try hard to act like invited guests at the entrepreneur’s table.
I’ve been thinking about these pieces because it’s been a couple years since we first started out. The fund is off to a decent start I think. We have terrific, supportive investors and I haven’t had to think about fundraising at all this year. I hope that as our firm gets further away from that Megabus ride next to vomit, we stay hungry and humble as we go about our business.
I’ve also been thinking about these pieces because there is a lot of gloom in the market. Capital is harder to come by, and later stage valuations are rationalizing. The Macro environment is looking pretty bleak, and at best, we can only hope for anemic growth in this country as we work through the deficit, reduce entitlement spending, and continue to deleverage. Everyone needs to buckle down, and we all need entrepreneurs to succeed more than ever. It’s a time to be supportive and respectful of their endeavors, not judgemental and dismissive.