The classical view of venture capital is that a VC invests in a company, grows it into revenue and breakeven, and then sells equity in it to the public in an IPO. The exit part is the VC’s can then sell their ownership interest in the startup to that public market of buyers as the company grows in value, or distribute their now-liquid shares to their limited partner investors to sell . . .
→ Read full post: What makes a good VC? — Exits
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After making a venture investment and building value in the startup, in preparation for an exit. This is the operational part of the job — how do you help a startup succeed? . . . This is the very belated third installment of my running saga about what makes a good VC. I have previously laid out a framework for identifying the skills that make a good VC, in rough chronological order through the process. Each installment covers a stage: Finding Deals Evaluating and Picking Deals Executing an Investment Managing and Growing the Deal After Investment Finding a Successful Exit Lets have a discussion of the skills involved in executing an . . . The VC business is a sifting business, as I have commented before. It is like hunting for pennies in your coin jar. Step 1 was about getting as many pennies in the jar, ideally as many promising pennies, as you can. In this Step 2, the VC is going through the jar trying to find the most valuable ones. . . . One of my overall areas of interest is where the venture capital business is heading in the coming decades. I thought I’d start out looking inward — looking at the job of a venture capitalist (VC) , what tasks a VC performs, and what skills make one VC better than another. The fact is there probably is only one ultimate measure of a VC that counts — return on invested capital. I’m not trying to dispute that. But . . . |
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© Claremont Creek 2012 |
