What I learned during my 10 months in VC…
Last August, through some tweeting and luck, I was fortunate enough to join the Ludlow Ventures team part-time as an Associate. I can…
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Last August, through some tweeting and luck, I was fortunate enough to join the Ludlow Ventures team part-time as an Associate. I can assure you; however, this role was anything but your traditional Associate role in a VC firm. Ludlow Ventures is composed of two full-time partners, Jonathon Triest & Brett deMarrais.
Anyone who knows them, knows that they are an incredible duo. Both are incredibly brilliant and product-focused, with perfectly complementary personalities. I’ve learned more in the past 10 months than I have at any prior internship. Naturally, I wanted to share these learnings with you. These lessons and advice are applicable to any future Venture Capitalists and/or future founders.
Respect the “little guys”
This one shouldn’t just apply to fundraising. In life, you should always respect the “little guys.” In the business world, there are countless stories of hiring managers asking their assistants to weigh in on the decision of hiring a job candidate.
Perhaps, more obviously Associates, Analysts, etc. all play a very important role in the decision making process of whether or not a VC firm invests. It is incredibly noticeable when I join a call, and the founders are annoyed that they aren’t directly speaking with a partner. As a founder, it is important to understand and ask about the structure/process of the venture firm you are speaking with.
For example, at Ludlow, Brett and I typically take calls together. Once we collectively decide whether we pass or are interested, we then hop on another call with Jonathon.
Venture Deals is your best friend
Venture Deals (Brad Feld & Jason Mendelson) -Amazon
Shortly after starting at Ludlow, Brett had recommended it to me. After reading it, myself, I can’t vouch for it enough. I’ve read countless articles published by venture capitalists and founders; however, none come close to providing such a comprehensive understanding of the fundraising process. As a founder or a VC, this book does an incredible job of capturing the entire fundraising process from both perspectives. Even if you are not fundraising or planning to fundraise in the near future, this book is a must-read.
Your network is your biggest asset as a VC
This lesson is a little bit more obvious; however, I can’t overstate how valuable your network is as a venture capitalist. Whether it is sharing deal-flow or calling a friend for a second opinion, I’ve exhausted my network countless times over the past 10 months.
There are too many people that have taken early bets on me, for me to have too large of an ego to speak with you.
I’ve done my best to take every single meeting over the past ten months. You honestly never know when another introduction or interesting deal will stumble in front of you. If you are ever interested in chatting, please don’t hesitate to reach out. I love hearing peoples stories and how they ended up in the technology industry.
Build candid and real relationships with all founders you talk with, regardless of your investment decision
I can’t overstate the value of building genuine friendships with founders. Every call we take, we remove all previous biases, and pride ourselves on being genuine.
There is no greater compliment, as a VC, than when a founder you passed on — still sends you deal-flow and introductions.
Brett deMarrais once said this, and it has really resonated with me. This is, and always will be, Ludlow’s mantra. There is no company too small, obscure, weird, outlandish, or big for us to chat with. Regardless of whether we invest, we have and will always do our best to help from afar.
It’s easy to critique and find holes within a startup.
It’s no secret in the technology world that a lot of startups fail. This is a lesson that I never really understood until I started to speak with a lot of early-stage startups. Every single startup that I’ve spoken with, I could find reasons for why they might fail. Avoiding biases from partners, colleagues, and friends is absolutely critical.
The moment your mind starts to be clouded with someone else’s opinion, your decision to invest or not invest should carry little to no weight.
In this industry, it is incredibly easy to be both optimistic and pessimistic. In my opinion, what makes individuals the best venture capitalists, is being able to perfectly toe the line of optimist vs. pessimist.
Fear Of Missing Out (FOMO)
By far the most shocking and interesting lesson that I learned about fundraising is how valuable of an asset FOMO is.
There are countless tactics that I’ve seen founders use to create FOMO. By far the most common and effective tactic I have seen is boasting the fact that big name Angels and/or VC firms participated in your round. An obvious example would be if Andreessen Horowitz (a16z) was leading your round, other VC firms would likely be chomping at the bit to fill the rest of the round.
Another common tactic is saying something along the lines of — “We are planning to fill out the rest of our round by the end of the week, we would love to hear back ASAP.” In my experience, there are very few times that I’ve seen this tactic work in the favor of the founders. This tactic is much more invasive and risky. Venture capitalists hear this a lot and will often interpret it as “fluff” or unnecessary pressure. In the case of Ludlow Ventures, we pride ourselves on quick response times. We don’t need the extra push.
As a founder, Fear Of Missing Out is one of your greatest sales tools.