Howard Morgan (co-founder of First Round Capital and currently chairman of B Capital) spoke at Cornell this past Wednesday. Howard received his PhD from Cornell in operations research in 1968 (I was 3 years old!). He has a wonderful experience set (see this Cornell article).
I have seen Howard speak a bunch of times, and I enjoyed this recent one the best. He gave some really interesting data driven insights on VC and startups, like that timing is the #1 factor in startup company success, with team being the #2 factor. So…..the element of luck is huge as timing is often a factor of luck. I have seen many companies that have almost failed, then struggled to survive for a few years and then hit it out of the park as the market ultimately caught up to the company’s product offering. Timing, timing, timing! Howard noted that his idealab co-founder Bill Gross gave a super and short TED talk on this topic. Worth watching.
On the non-data driven insights, Howard mentioned a few times that that his personal relationships with startup management teams is one factor that drives him to keep being a VC. He simply enjoys the interactions and working relationships. We have all heard that the management teams are crucial to success – execution is king and only a good management team can execute. But taking this to the level of personal relationships is pretty interesting.
It boils down personal chemistry. For Howard, if he does not see himself developing a positive working and personal relationship with the startup management team then an investment won’t happen. I completely agree. And I have to admit that this factor has not always been #1 on my decision list. It should be. And will be.
The startup team/investor relationship is a long one. Often 10 years or more. Make it worth the effort.