As someone who is doing his MBA right in the heart of Silicon Valley, I notice a lot of people talking, dreaming, wishing to work in Venture Capital. In fact, not that surprising considering that a recent study of 151 VC Partners in the US found that 53% of them had MBAs – 60% of whom from either Stanford or Harvard (source).
At some point I was so intrigued by the industry that I decided to find out for myself. Given my passion for emerging markets, I wanted that experience to take place in South East Asia, so I ended up with Monk’s Hill Ventures (MHV) which is an industry-agnostic fund that invests across the region (focused on Series A investments).
And as I’m thinking about whether this is an industry I want to dedicate myself to post-graduation, I’ve been thinking a lot about what kind of person you need to be to work successfully in VC? Here are the five traits that I have found to be the most important.
One thing that stood out to me from even before I started with MHV, was the reputation that both partners had. I noticed how some of the most random people in my network had heard of Peng and Kuo-Yi. Not only was their network wide-ranging, but so was their reputation. And since I got to work at MHV, I've been able to see first hand why they were so well-known: they are givers! Despite the increasing number of VCs based out of Singapore, they aren't acting competitively, but trying to help just anyone that comes their way. If the company is not a right fit, they make intros so that the founders find the help they are looking for. As VCs, they see their mandate beyond just building a excelling VC firm, but to help co-build a thriving ecosystem.
Writing checks is easy, managing companies is difficult. And that’s why a good VC should be capable of, to have enough experience (mixed with intellectual curiosity and critical thinking), to not just provide the cash, but to also provide the guidance. The cash will help keep the company going, but good advice and a strong network will help the company get to the next level.
A healthy degree of Extroversion
The first few times I tried to connect with Peng through his assistant, I was offered time slots that were 5+ days away. How could someone be that busy I wondered, but little did I know. Peng and Kuo-Yi are out on the streets talking to entrepreneurs from morning until late into the evening. Each day in their calendar looks like a book shelf, filled with 45-minute slots and pitches. There are weeks when they don’t even come to the office. After attending some of these meetings myself, I realized how much of an extrovert I need to be to have enough energy to meet that many people each day.
Good Judge Of Character
Whatever start-up idea you look at, be assured that it exists in same or similar shape somewhere else in the world. Actually more than just once. Ideas are out there en masse. What it really comes down to is the execution. Execution is everything, and execution is really something that is strongly tied to the founder or founding team. Being able to assess a founder’s character and their ability to deliver on their promise and vision turn out to be as important as the understanding a VC needs to have about the business and the space it is operating in.
Vision & Opinion
I find it important to have a vision and an opinion about the industries that one is investing in. And along with that, the willingness and readiness to debate the future of those industries. Where are things headed? What is shaping the industry? Do you see where the puck is or do you see where it is going? Having insight and thus foresight is really important because at the end of the day you want to invest in the companies that get it, that move towards the puck. That’s how you build a portfolio of winners and how you create return for your LPs.
Are there examples out there of successful VCs who don’t have all of these traits? You bet there are! Yet I have found these traits to be extremely helpful in building trust with entrepreneurs. And while there are certainly plenty of other traits that matter, these are the ones I have come to consider the most apparent ones.