Saw the documentary “Something Ventured – The Risk, Reward and the Original Venture Capitalists“. It was great! loved it… it was so much fun to see or rather to get transported to a time when it all started and all the challenges that the industry veterans like Arthur Rock, Tom Perkins and Don Valentine talk about when they started. It is actually quite interesting to see the background of those who basically started the industry of Venture investing. Arthur Rock came from the Investment Banking business, Tom Perkins was an Engineer and Don Valentine was a Marketing and Sales Executive. The common theme that just got reinforced for me is that all these smart people almost 60 years ago faced the same questions and challenges.
The language that they use is quite reveling, for example “I was an accidental entrepreneur”, “We really did not know what we were doing”, “There was enormous risk when we started”. It would be even more interesting to see all those who failed miserably in this business, because that is the nature of this industry. We have a survivorship bias, ie only those who survive tell the story.
Someone had to see the opportunity, but none of them knew where it was going. And it is also very interesting to me that when they all ventured to raise capital they all got a LOT of NOs… that is how VC capital raise works.
The summary of the documentary for me was something very profund and simple, Entrepreneurs are the leaders without Entrepreneurs there is no VC business. To the credit of all the VCs who survived long enough to tell the story is that all of them were extremely hands on ie. they helped entrepreneurs in every and all ways they could. They brought in mentoring, expertise, business networks, business relationships etc. Even the Steve Jobs of Apple had to learn management, marketing and sales and distribution from Don Valentine and Mike Markkula, Marketing Manager at Intel and Don Valentine used to be the Marketing person in Fairchild Semiconductors. There is a huge body of knowledge that gets missed when we look at Entrepreneurs who have been successful, there are a number of people who help them, mentor them and guide them to reach that vision. That in my view is the art of Venture Investing.
All the VCs worked with the companies to build them and many of the VCs passed on opportunities. The classic quote was by Nolan Bushnell, the founder of Atari – “I could have had 1/3rd of Apple for $50.000… big mistake”, ‘cos he passed on the opportunity! Not just that, even Don Valentine passed on Apple until Mark Markkula took over Apple as its President and CEO and built a very powerful board with experience and expertise to guide the company. A lot of that information gets lost when someone looks at the shinny new iPhone. End of the day it is always People who make things happen and putting the right team together is an Art. Successful VCs know how to do it and when to do it and what is needed. It is not taught in School but through their life experiences. If you are a VC or an investor, ask yourself are you doing the same amount of work that these people did? and if you are an Entrepreneur ask yourself do you have the right board and advisors and investors who can help you to execute and achieve your vision.
Here is the list of pioneer VCs interviewed in the movie.
|Arthur Rock||Early investor in Fairchild Semiconductor, Intel, Apple and Teledyne|
|Tom Perkins||Founder of Kleiner Perkins Caufield & Byers, early investor in companies linke Genentech and Tandem|
|Don Valentine||Founder of Sequoia Capital; early investor in companies like Apple, Cisco, Oracle, Electronic Arts and LSI Logic|
|Dick Kramlich||Founder of New Enterprise Associates, investor in companies like PowerPoint, Juniper Networks, Macromedia and Dallas Semiconductor|
|Reid Dennis||Founder of Institutional Venture Partners|
|Bill Draper||Founder of Sutter Hill Ventures; Founder of Draper Richards|
|Pitch Johnson||Co-founder of Draper and Johnson Investment; Founder of Asset Management Company|
|Bill Bowes||Founder of US Venture Partners|
|Bill Edwards||Founder of Bryan and Edwards|
|Jim Gaither||One of the early developers of the venture financing structure still in use today|
- Something Ventured: The Founding of the Venture Capital Industry (feld.com)
- Something Ventured (paulmiller.org)
- Cleantech Falls Hard in ’12; Kleiner Is Year’s Most Active Investor (pehub.com)
- Venture Capital Fundraising Was Flat in 2012 (blogs.wsj.com)
- Meet Mike Rothenberg, The 27-Year-Old Whose Seed Fund Could Be The Best Bang For Your Cap Table Buck (techcrunch.com)