What is a Venture Partner?

One of my students just asked me what a “Venture Partner” is in the context of a venture capital firm.  I quickly typed in “venture partner” into the Wikipedia query box.  No results.  Kind of surprised me.  So, then I typed “venture partner definition” into the Google search box.  Lousy results.  So, I had to wing it.

Here is my take to this not so uncommon question.

First, to make sure we are on the same playing field……many VC firms have hierarchies (particularly the large ones).  Examples:

1.  Managing Partner/General Partner (I have seen some with Managing Directors too like an investment bank):  top dogs that run the shop and own most of the carried interest.

2.  Principals:  next in line to the top.  Typically folks that have been at the firm for a good chunk of years and are learning all about the business (fund raising, investing, managing investments, managing investors, harvesting).

3.  Vice Presidents:  below Principals.

4.  Associates (sometime there are senior associates too):  below the VPs; the new folks on the block, typically young in age.

5.  Other staff like a controller or CFO; marketing coordinator; investor relations manager; and general counsel.  Again, all these roles are dependent on the size of the firm and amount of capital under management.

Critically, it is completely common for someone to be hired in as a principal or managing partner depending on the experience level.

Also, critically, some firms only have the tops dogs and a few principals.  There is no one right way to cut the biscuit when it comes to VC titles.

Then there are the ambiguous titles of Executive in Residence and Entrepreneur in Residence.  These typically are people paid by the VC firm to spend time at the firm and perhaps create a company while being incubated by the VC or be available to join a new portfolio company that the VC invests in.  These roles typically do not have any carried interest.

So, now to Venture Partner (I have also seen Venture Advisers).  It has lots of flexibility and ambiguity.  It might be a former General Partner who wants to step back from the day to day running of the firm and thereby avoid doing things that are not particularly pleasant  all the time (like fund raising or sitting on way too many boards or managing limited partners).  It might be a real tech wizard that the VC firm wants to keep around to help vet deals and companies.  It might be a real ops wizard that can parachute in and fix things.   So, it is a nice catch-all category.  It carries cache.  And it often carries carried interest too (though a lower share).

Hope that answers some questions!

 

Being Part of a Team

I have been doing a lot of thinking lately about the desire to be part of a team.  Let’s call this “Team Desire”.   Some people have it.  Some people don’t.  Some VCs have it and some don’t.  Some have it more than others.   I would think that all CEOs have it, and if they don’t they should consider switching titles.

Being part of a team…….hmmmm.   Do those that have Team Desire have some need to feel included?  Maybe.  Do those that have Team Desire have some need to be recognized?  Maybe.  Do those that have Team Desire have a need to feel reassured?  Maybe.   On these 3 questions, my general thought is “who cares.”  These are not overly healthy aspects of Team Desire, but I am sure they exist often.

I have Team Desire.  This applies to my role as a VC and in many other aspects of my life (like my soccer team or my group of skiing buddies).  In my VC role, there are at times conflicts between being on the company team and, well, being a VC.  Some CEOs see those conflicts as apparent too often (in my view) and some don’t.  Some VCs might see those conflicts as apparent too often and others surely don’t.  When things at a company are not going so well, the conflicts are more apparent.

Personally, I get over the real conflicts and apparent conflicts by knowing that certain rules of the VC dynamic are not changeable and not worth arguing about too much.  VCs fund companies.  Investors have lots of “say”.  VCs need to be treated like important shareholders and spoon fed constant information by the CEOs of portfolio companies.  VCs have board reps and the board controls the company.  Plain and simple rules.  I take these rules for granted.  Once I do that and hope that others on the team do also, then becoming part of the functioning team is pretty easy.  Team Desire wins.  It becomes easier to help and have the help accepted.  While the CEO cannot fire the VC from the board, the CEO can and should fire the VC from the inside team if the VC is not playing like a team member.  I think that most VCs actually want to play on the team for the right reasons and advance the cause dramatically.

At the companies in which I am involved, it is always about the team.  Earning trust from management and visa versa.  Working hard towards achieving goals and helping out in any way I can.  If a CEO considers this intrusive, then the team is not functioning right – either it is intrusive (and that needs correcting) or the perception is misguided (and that needs correcting).

I am sure that I will continue to think about this topic more and write more about it.  Team  Desire is the way my mind works.  Interesting topic – not that easy to write about.

2011 in review

This morning I woke up and did what I normally do – I picked up my DroidX and read my email.   And, in particular, I read Fred Wilson’s blog post.  Fred blogs every day (so does Brad Feld) and I like waking up to Fred to and Brad.  Yeah, sure, start the jokes….

Anyway, this morning’s post by Fred reviewed the stats from his blog for 2011.  Here is the post.   During 2011, Fred had 4.2 million views and 58,000 comments.  Wow.

So, you can imagine my big chuckle this morning when I continued to view my emails and found my year end review stats on my blog sitting in my inbox.  Hey, you got to start somewhere……5,900 views in 2011 :).  Like the WordPress stats geeks have reminded me, “A New York City subway train holds 1,200 people. This blog was viewed about 5,900 times in 2011. If it were a NYC subway train, it would take about 5 trips to carry that many people.”

Enjoy the full report, and remember, we all cannot be Fred……THANKS for your readership!  And Happy New Year!!

Click here to see the complete report.

Bigger News: Cornell Rumored to Win!!

Here is the text of a WSJ article that was posted tonight on WSJ Online.  Cornell wins!!  Game changer for us and NYC.  Wow!!

Article:  Cornell Wins Contest For City Tech Campus

Mayor Michael Bloomberg plans to announce on Monday that Cornell University won the high-profile competition to build a new applied-science campus in New York City, people familiar with the decision confirmed Sunday.

The announcement comes three days after Stanford University unexpectedly withdrew from the competition following tense negotiations with the Bloomberg administration. Stanford’s sudden exit left Cornell as the clear favorite, and Mr. Bloomberg plans Monday afternoon to make it official.

On Friday, in a huge sign of support for Cornell’s bid, the university said it had received a $350 million anonymous donation toward building the campus, the largest gift in the university’s history.

Mayoral advisers are hopeful the campus will be a legacy project for Mr. Bloomberg, who has struggled in his third term with a series of setbacks that have damaged his reputation.

When Stanford withdrew from the competition, several people familiar with the negotiations said the university preferred to quit than lose. Stanford officials saw the “writing on the wall,” said one person familiar with the negotiations.

Stu Loeser, a spokesman for the mayor, declined to comment. Officials at Cornell did not respond on Sunday to a request for comment.