Earlier this week I had the opportunity to spend an hour one on one with Fred Wilson. Fred is arguably the premier venture capitalist in the world today. Between his investment track record (Twitter, Zynga, Etsy, Foursqaure, etc.) and obnoxiously awesome blog (*the* standard against which all other tech and venture blogs are measured), Fred is the Man.
As a young person in the industry, I reached out to Fred for career guidance. I spent 90% of the meeting listening. In hindsight, I spoke too much.
Interestingly, the primary impetus for the meeting - my hope to glean insight from Fred’s experience - was also the key takeaway from the meeting: there is absolutely no substitute for experience.
While there are certain traits common to all successful investors - intellect, intuition and disposition - these are merely necessary, but insufficient, conditions to being great. Venture investing (like many investment professions) is heavily informed by pattern recognition, and for better or worse, pattern recognition is naturally derivative of experience.
The reality is that no amount of intellect, intuition or disposition can fully prepare a young VC to manage a dysfunctional board, bite the difficult bullet of a down round financing, push through painful but necessary management changes, or navigate macro economic cycles.
In fact, it’s a complete wonder to me that young venture investors find a place in the eco-system at all (and there are many who argue that there really is no place for young, relatively under-experienced venture professionals - venture should be dominated by former seasoned entrepreneurs and corporate execs). And yet, not only are there young VCs, but many in this new breed are excelling in the industry. In some ways I think of a firm ‘betting’ on a young VC as analogous to investing in a first-time entrepreneur - you know there will be mistakes along the way, but you hope that the big successes will outweigh the inevitable mistakes and that overtime the individual will grow into a seasoned, mature and experienced pro.
In the absence of years of experience, there is one absolutely critical way to mitigate the risks of inexperience while young investors learn on the job - mentorship. As Fred has advocated time and again on his blog, the venture business is best learned through apprenticeship (at the very least this is true for those who are career VCs and not transplants from successful entrepreneurial careers). No training program in the world can prepare one to be a great VC precisely because experience is such a principal component. Having the opportunity to lean on and glean from the experience of those who have walked the walk is invaluable. It is not a ‘nice to have’, but rather a ‘need to have’.
In my own life, I have had the great fortune of having phenomenal mentorship - from my parents and in-laws to my friends, siblings and wife (a successful entrepreneur herself). But I am truly blessed to glean from the daily mentorship of my remarkable colleagues at IA - Roger, Brad and Justin. It is because of their support, guidance, and not-so-infrequent ass-whooping that I feel so optimistic growing into the role of a VC.