Takeways: Tips on Getting Through Your First Year in VC

As my first year as a VC comes to a close, I thought it would be great to share some perspective on how to make a smooth transition. In my past life, I was investing in the public markets which is a completely different ballgame than investing in private companies. So clearly, my mindset needed to change and I was quickly forced to adapt to a different approach. Here are key takeaways from this transition.

Sift through the noise

Information on publicly traded companies is much more readily available, as is the coverage and most times the breadth of information available. So whether you get it right or wrong, there is plenty of information to make investment decisions. In the private markets, you really need to do the leg work and have an ever evolving opinion about markets that you invest in (software and technology enabled businesses in our case). So when you are talking to companies that say they are big data, e-commerce, social collaboration, and so on — you better be able to distinguish who is telling the truth and who might be tweaking it slightly. Understanding what businesses are really providing their customers is essential.

Get up to speed

In my last gig, investments often times were made for a few months or quarters. At OpenView, we strive to build great companies that will take time to build and ultimately become winners in their market. So from the initial contact pre-investment through exit, it takes much, much longer, therefore adjusting my sense of investment horizon was crucial.

Manage people well

Clearly this is not limited to venture capital and investing, but it is a crucial part of my job. Building relationships with entrepreneurs and CEOs is number one on the list for obvious reasons, but also within our team. Understanding the strengths and interests of everyone (partners especially) and qualifying prospective investments is crucial. We invest in fewer companies than most VCs and spend an incredible amount of time with them post-investment, so it is very important to make sure I am connecting the right people together.

Take everything in stride

You will make mistakes, you won’t know the answer to certain things, and you will have conflicts with people. But addressing them right away and calmly finding a solution will leave everyone better off. We invest within extremely disciplined metrics so we often pass on a company who is actively raising and will probably do very well, but they just aren’t at the right stage. Other times we might miss a deal that seems like it would have been perfect for us. But if you are honest in real time and proactively try to figure out why you missed that deal, you will be less likely to sour a relationship with an interesting company and you probably won’t miss the next deal.