Five things I learned (and relearned) in my first year as a VC
1. Time is a brutal taskmaster
You want to give everybody a fair crack of the whip but in truth you have to filter fast. The elevator pitch really does matter. If you, as a founder, can't communicate the essence of your proposition and your own skills quickly you won't cut through the noise. This filtering requires intense concentration – you need to stay on top of your game or you come over as rude and dismissive. I haven't always got that right but hopefully I'm getting better.
2. You live with your mistakes a long time
This is not a numbers game – it is a quality game. More than half of all companies you invest in will never return the money you put in. If your focus is all about scrutinising business plans and investing on that basis, you can pretty much guarantee your failure rate will quickly overtake any prospect of a positive commercial return.
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Instead, you have to spend time scrutinising the quality of the people you're investing in. I am finding I am constantly raising the bar all of the time. Invest in people you respect and like as when times are tougher you will need to be in the trenches together digging each other out.
3. Not all money is equal
Having been at the sharp edge of building a successful business, I know the pressures are great enough without having third party event horizons driving your decision process. At BGF Ventures we have focused on ensuring any founders understand that we invest from our own balance sheet so we can afford to be much more patient with no forced exit pressure as we approach an artificial deadline dictated by our fund life.
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That, combined with our founding, operating and investing experience and UK only focus, makes us very different. We have found that having real operating experience in our team has helped hugely when speaking to founders.
4. People run businesses, not spreadsheets
Metrics are critical to executional success and long term value creation but your ability to recruit brilliant and like-minded talent to join your journey and help deliver the vision is what will ultimately determine your success. We are certainly not immune from that reality. Putting together a great team of people is the number one priority at BGF Ventures. People who are aligned with our values of staying humble and helping founders.
5. There is extraordinary depth of talent in this country
I am constantly amazed with the outstanding quality of the entrepreneurs we are meeting… and the fact that they want us to be part of their journey! To name a few standout stars: Ted Nash at Tapdaq, already at the age of 24 on his third success.
Timo Schmidt at Gousto redefining food delivery to your home and Virginie and Sara the founders of ToucanBox, a kids craft subscription business born out of their own experiences and frustrations as parents. These are people the whole country should applaud. They are innovating and creating success. Being part of their journey is a real joy and a privilege.