Editor’s note: Bill Warner writes “The Angel Connection” which is a regular feature in WRAL Local Tech Wire. LTW asked consultant Bill Warner to share advice for entrepreneurs seeking angel investors and/or venture capital investment. He is chairman of the , an angel investor network with members throughout the Southeast.
By Bill Warner, special to Local Tech Wire
RESEARCH TRIANGLE PARK, N.C. – I recently read an amazingly refreshing perspective by of Sigma Partners in PE HUB. It’s all about what it takes to be a successful VC. It is counter-intuitive but makes a lot of sense.
A Fresh View of a Successful VC
With only 10 years as a venture capitalist, with some very successful investments and lucrative exits, Gretsch is worried about becoming stale and out of date. Heck, most VC’s with his record of success would be riding high, living the good life, and pontificating to the venture community about his formula for success.
But no! Gretsch (who was voted No. 19 on the 2009 Forbes Midas List of top venture capitalists) doesn’t think that the longer you’re a VC, the more skilled you become in picking winners. Instead, he theorizes that if you’re a VC for more than 10 years, you’re likely to grow worse at your job over time. And, he has some data that point out that this may very well be true. Even with spotty verification, Gretsch takes this seriously. Here’s why:
• The older a VC becomes, the further out of touch with new technologies they become
• As they move up the professional pyramid, their network actually shrinks because they are working with fewer and fewer people
• They are not meeting the new people that are really bringing innovation to the market; as a result they miss trend setting ideas
• They are stuck in looking at existing market sectors for new opportunities, missing new and significant market changes
• Family demands increase as they get married and have children
How Do VC’s Freshen Up?
Gretsch’s simple advice is to “remain humble, keep your attitude in check, and stay hungry.” The hard part is to remember how that all feels. Here’s his formula, which might apply to many of us in lots of different lines of work:
• Increase the number of relevant technologies with which you are familiar
• Follow the leading industry analysts to learn what they are thinking
• Build relationships with the next-generation of successful investors and technologists
• Reach out to the younger entrepreneur and learn from their fresh ideas
• Always be better at what you do
I think Gretsch really believes this and will remain on top in the VC community for another decade.
About the author: Bill Warner is the Managing Partner of , a business consulting firm in the Research Triangle Park area of central North Carolina, and is the chairman of the , an angel investor network with members throughout the southeast.
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