Lessons Learned from Running a Micro VC and the Importance of Network Learning Skills

Lessons Learned from Running a Micro VC and the Importance of Network Learning Skills

Introduction:
Running a micro VC fund is no easy task. It requires dedication, financial stability, and a deep understanding of the industry. In this article, we will explore the lessons learned from running a micro VC and the importance of network learning skills that universities should incorporate into their curriculum.

1. The Challenges of Running a Micro VC:
   The first thing to note is that most VC funds are failures. Just like startups, the statistics show that 9 in 10 VCs will not even achieve 1x returns. Therefore, before deciding to start a micro VC, it is crucial to do your homework. Seek advice and insights from at least 10 micro VCs to gain a comprehensive understanding of the challenges and potential pitfalls. Additionally, it is important to be in a solid financial situation as running a micro VC can be detrimental to your personal life. Most of the fund's money needs to be used for investing, leaving little for personal expenses. It is essential to have a clear budget and understand that your salary may be significantly lower than what you anticipated.

2. Bootstrapping and Capital Calls:
   Bootstrapping a micro VC is incredibly difficult. Not only do you receive minimal to no salary, but you are also mostly prohibited from making money outside of your work. This restriction can make it challenging to sustain yourself financially. Furthermore, fund managers typically invest 1-5% of the fund size, and capital calls are done over the course of three years. This means that you need to plan your investments strategically and have a long-term outlook to ensure the fund's success.

3. The Benchmark for Success:
   The "gold standard" for profitable VCs is a "3x return" benchmark. If you can achieve a 3x return, you are considered excellent in the industry. However, it is crucial to understand that running a micro VC comes with immense risk. Similar to startups, the upside potential is significant, but there are no guarantees. It is a high-stakes endeavor that requires dedication, expertise, and the ability to weather uncertainties.

4. The Importance of Network Learning Skills:
   Moving on to the topic of what universities should teach but often overlook, network learning skills are of utmost importance. No graduate should leave their institution without a solid understanding of their professional field. We live in a network society, where connecting with mentors, fellow seekers, and knowledge catalysts is easier than ever. Therefore, universities should focus on developing network learning skills that empower students to engage with communities and networks outside the academic environment.

5. Co-Designing a Framework for Network Learning:
   To incorporate network learning skills into the curriculum, universities need to co-design a framework that supports students in engaging with professional communities. This should start from the first year of studies, allowing students to build connections and learn from industry experts. It requires a group of committed educators who are willing to change the system and equip students with the necessary skills to thrive in their professional endeavors.

6. Modeling the Behaviors of Engaged Network Learners:
   Faculty members play a crucial role in modeling the behaviors of engaged network learners. If they cannot demonstrate these behaviors themselves, they should not be teaching. Students can benefit greatly from cognitive apprenticeship, where they connect with external communities and professional networks throughout their studies. By immersing themselves in real-world experiences and leveraging the power of networks, students can enhance their learning and prepare for their future careers.

Conclusion:
Running a micro VC is a challenging yet potentially rewarding endeavor. It requires careful planning, financial stability, and a deep understanding of the industry. Additionally, universities should prioritize the development of network learning skills to empower students and prepare them for the professional world. By co-designing frameworks that support engagement with communities and networks, universities can bridge the gap between academia and industry, ensuring students have the requisite skills to succeed.

Actionable Advice:

1. Before starting a micro VC, do thorough research and seek advice from experienced professionals in the field. Understand the challenges and potential risks involved.

2. Plan your finances carefully and have a clear budget. Running a micro VC requires financial stability and a long-term outlook.

3. Universities should prioritize incorporating network learning skills into their curriculum. Encourage students to engage with professional communities and networks outside of academia to enhance their learning and career prospects.