Carey Lai's Corner

A former lemonade stand entrepreneur turned Venture Capitalist

WHAT TYPE OF BACKGROUND MAKES A SUCCESSFUL VENTURE CAPITALIST?

backgroundHere’s a question I often receive from people interested in making a jump into venture capital.  Some of the responses I received early in career include prior start-up, investment, investment banking, and/or operating experience.  Truth be told, I think a number of backgrounds can make a successful venture capitalist.  I don’t mean to sound universal about it.  However, early in my career, I resented how people would often tell me the path to being a successful venture capitalist was the path they took.  So, allow me to point to a couple of poignant examples: John Doerr and Michael Moritz.

John Doerr.  John Doerr of Kleiner Perkins Caufield & Byers is often referred to as the Michael Jordan of venture capitalists.  Why?  Just look at his enviable track record of investing in successful companies: Amazon, Compaq, Google, Intuit, Macromedia, Sun Microsystems, Symantec.  Need I say more?  If you think John Doerr ran a successful start-up prior to investing in all of these wildly successful companies, you’d be wrong.  Doerr joined Intel in 1974 just as the company was transitioning its memory business into the microprocessor business.  Doerr eventually became one of their most successful sales people.  Doerr comes from a operating background, but no doubt, a wildly successful venture capitalist.

Michael Mortiz.  If John Doerr is the Michael Jordan of venture capitalists, Michael Moritz of Sequoia Capital has to be the Tiger Woods.  I know.  I’m mixing up sports analogies, but there can’t be two Michael Jordans in basketball.  And, Michael Moritz isn’t young enough to be Kobe Bryant.  Anyways, you get my point.  Michael Mortiz also has an enviable track record of investing in successful companies: Agile, Flextronics, GameFly, Google, Green Dot, Kayak, LinkedIn, PayPal, Yahoo, and Zappos.  If you’re wondering what Michael Moritz did prior to joining Sequoia Capital, he was a reporter for TIME.  A reporter?  Yes, a reporter.  He even wrote an interesting book called The Little Kingdom: the Private Story of Apple Computer.  It’s actually a good read.  So, no operating background, but a journalistic background.  But, a super successful investor.

So, what’s the key takeaway?  Successful investors come in many shapes and sizes.  There’s a wide variety of skills that ultimately bring success.  So, if you’re interested in jumping into the venture capital business, don’t let anyone tell you that you don’t have a background that fits.

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This entry was posted on April 27, 2011 by in Uncategorized.
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