Carey Lai's Corner

A former lemonade stand entrepreneur turned Venture Capitalist

Are VCs More Important Than Their Firms?


All too often, I meet entrepreneurs who have star envy when they meet with top-tier venture firms such as Sequoia, Kleiner Perkins, Benchmark, etc.  And, all too often, they fail to realize that it’s the partner on their Board, not the firm.  In a new study published by Harvard and Carnegie Mellon academics, the study finds that

“when it comes to predicting which startups will be successful, individual venture capitalists are roughly five times more powerful as leading indicators than the firms for which they work.”

Initially, I found this study really interesting.  But, after thinking about it for a while, I came to the conclusion (without using Econometrics), that this is similar to basketball players and teams.  Michael Jordan remains by far one of the greatest players ever to step onto the basketball court.  Whether he played for the Chicago Bulls or the Los Angeles Lakers, he would still be one of the greatest players ever to step on the basketball court.  This goes for players such as Kobe Bryant, Lebron James, etc.  Lebron was a great player with the Cleveland Cavaliers and remains an awesome player with the Miami Heat.  If I use a basketball analogy, maybe it’s more clear that it’s the VC and not necessarily the firm.

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This entry was posted on November 12, 2013 by in Uncategorized.
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