Ask @Jason: What’s different today about ways to break into VC?

TL;DR

Venture capitalists who have operating founding experience can provide better advice to startup founders compared to investors without such experience.

Transcript

okay let's take another question and this one is from marcelo miranda and they asked hey Jason mccabe calacanis quick one in your experience can investors without operating founding experience have the same level of competency as entrepreneurs turned investors what advice you have for someone looking into this path you're probably on the wrong side... Read More

Key Insights

• 🏃 Startups are a unique operating system, and individuals who have run or started a company can provide better advice to founders.
• ❓ A venture capitalist's performance is not necessarily determined by their background or experience, as success can be achieved regardless.
• 🏂 Entrepreneurs may prioritize board members with operating experience or specialized skills, such as growth expertise.

Questions & Answers

Q: Can investors without operating founding experience be as competent as entrepreneurs turned investors?

While it is possible for investors without operating experience to be competent venture capitalists, evidence suggests that entrepreneurs turned investors who have firsthand knowledge of running a startup can provide more valuable advice and support to founders. The complexity of startups requires a unique operating system understanding.

Q: Does a venture capitalist's performance correlate with their background or experience?

No, a venture capitalist's performance does not necessarily correlate with their background or experience. Examples such as Fred Wilson and Bill Gurley, who are highly successful venture capitalists without operating roles, show that success can be achieved regardless of their background.

Q: Will entrepreneurs prefer board members with operating experience or investors without startup experience?

In most cases, entrepreneurs may favor board members with operating experience or specialized skills, such as growth expertise, over investors without startup experience. Founders often value the practical knowledge and insights that come from someone who has personally experienced the challenges of running a business.

Q: Is it possible to excel as a venture capitalist without running a company or starting one?

While it is possible, it is not probable to be a great venture capitalist without having run or started a company. However, the rise of the best operators from management teams in startups provides a pathway for individuals with exceptional operational experience to become valuable venture capitalists.

Summary & Key Takeaways

• Venture capital was previously believed to be the domain of individuals with finance or business degrees, but it has been proven that startup founders can provide more valuable advice due to their understanding of the unique operating system of startups.

• The performance and success of venture capitalists do not necessarily correlate with their backgrounds or experience.

• Entrepreneurs may prefer board members with operating experience or specialized skills, such as growth expertise, over investors without startup experience.