#BeYourOwnMentor – Independent Study in Early Stage VC

Every day is a journey, and the journey itself is home.
– Matsuo Basho

Big new ideas take years to develop. People make fun of you along the way. Stick with it.
– Chris Dixon
Adapt what is useful, reject what is useless, and add what is specifically your own. 
– Bruce Lee

Preface

Around March 11, 2016, Maya Horgan Famodu (@mayahorgan) sent me a text . . . she had agreed to sit on a panel at a conference at HBS to discuss the landscape for early stage venture capital and startups in Africa, and she was worried that she did not know enough about being a venture capitalist. Maya is the founder of Ingressive, a social network and venture fund that invests in early stage African startups.

I offered to create an outline that she could use to teach herself what she needed to know. Why? I have been compelled to do that for myself since December 2008 when I started this journey in the midst of the financial crisis, and I figured it could save her and others like her some time.

Since then I have shared that outline with a few other of people . . . Most recently with Samantha Wong (@holasammy) – she runs investments operations at Blackbird VC in Australia, after she stopped by to chat over coffee at KEC Ventures on January 24, 2017. We had an interesting conversation about a range of topics, and at the end I told her about this outline saying I’d send it to her  . . . perhaps she’d find something useful. Her response after she returned home to Australia and finally had a chance to read through the outline took me by surprise.

Here’s a portion of her email;

“How widely can I circulate this (with attribution) eg to my team and others in my network? Have you published this as a blog post – if not, why not?
I would feel like a fraud just copying & pasting the links. It’s truly an amazing resource.”
I wrote her back and promised to publish the outline. So, this is it . . . I am keeping my promise to Samantha. I have made only a few edits to the email on which this is based, for added background and clarity. Weird formatting issues are related to problems with “copying  + pasting” stuff from gmail to WordPress.
I hope other emerging early stage venture capitalists find it useful . . . especially in situations where they lack easy access to mentoring from more experienced VCs. Traditionally, VC has been an apprenticeship business. And where possible, I think mentoring/apprenticeship is the best way to go . . . but, I also believe that . . . “if no one will help you, you must do it yourself.”
I am still working through some of this stuff myself. If you discover a book or blog post you have learned a lot from, please share it in the comments.
This is that email . . .

Re: Independent Study – Venture Capital + Startups: V10.0

Here are some suggestions to help you craft an Independent Study in Early Stage Venture Capital Investing. Consider this a mere starting point . . . The basic concept is that this could form the basis for a two-semester graduate-level seminar for budding venture capitalists. My expectation is that they could establish a fund after taking a class based on these recommendations – no, there are no fundraising tips or trade secrets.
I do not suggest books on topics for which professionals or outsourced service providers can be hired to set things up. It’s not that those topics do not matter, but rather that, in my opinion, they are not the activities that help a VC create the most value for a fund’s limited partners. So there’s nothing here for which a lawyer’s advice or an accountant’s advice is the way to go, for example. Also, no pointers on the operations side of running a venture fund.
I often post #Bookfies of books I am reading, or have added to my reference library, on Twitter and Instagram, if you want other suggestions.
Pointers;
  1. You do not have to progress through this linearly, you can jump around from one idea to another or even explore more than one topic at a time. You do not need to read the books from cover-to-cover either; you need to be able to implement “Just-In-Time” learning
    • That kind of learning is not the same as how you’d learn if you were taking the course in a college class, for example. Don’t get too bogged down at any point. You can always come back to material that is not clear at first. Also, you can ask people who understand that topic better than you do to help you understand it more fully.
  2. You should probably read the blog posts first, then read the books, and then go back to the blog posts and so on until you feel you understand a concept well enough to move on to another.
  3. Write. Write. Write, in order to sort through the concepts and ideas you are trying to understand. Apply what you are learning . . . Pretend you were making an investment, and then apply the topic you are studying to that investment. Write investment memos to explain why you think an investment makes sense. Here’s a link to the Deal Memo Roelof Botha at Sequoia Capital wrote to his colleagues to urge that they invest in YouTube
  4. This is just a starting point . . . The venture capitalists I admire most are always learning. To be a good VC you have to start by being committed to lifelong learning, how else could you connect the dots and invest in startups that will change the future?
  5. I like reading footnotes, endnotes, bibliographies, and references . . . That’s how I discover other sources and gain a sense of how the author built their own base of knowledge which then helps me decide what other sources I might consider.
  6. I like the idea of small groups of emerging venture capital managers forming mentoring circles and teaching themselves through group work.
  7. This article by Matt Turck is for anyone trying to find that elusive first job in venture capital; Playing “fake VC” (or the portfolio approach to getting a job in venture capital).

Tips on Learning How To Learn

Understanding The Business of VC

Angel Investing
Note: Many VCs started out as angel investors, and then built upon their success.

Documentaries

Learning To Assess Startups & Their Business Models

Assessing People and Teams

Resources for Managing Founder Anxiety and Depression: This is a topic I personally care about more than anything else, because of my experience watching my mom build a number of small businesses from scratch in northern Nigeria. That was before she started a school in our garage in 1986 . . . She’s been doing that since, and has now educated hundreds of kids who have gone on to work all over the world. I know the physical and emotional tolls that entrepreneurs face. I am always looking for new resources to add to my list.

Negotiations – With Other Investors & Potential LPs

Career Reflections

Have fun!
Brian
(Twitter, Linkedin, Facebook . . . and you can email me: brian@kecventures.com)

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