MBA@UNC San Francisco Immersion: Entrepreneurship and Venture Capitalism
At MBA@UNC’s 2015 immersion in San Francisco, students in the Innovation track had a chance to learn about entrepreneurship and venture capitalism directly from a variety of top founders, executives and venture capitalists. Here’s a closer look at two panel discussions.
The Entrepreneur Panel at the San Francisco immersion was moderated by MBA@UNC Executive Director Susan Cates, and featured Joseph DeSimone (Carbon3D), Thomas Layton (Elance-oDesk), Anthony Soohoo (Dot & Bo), and Bill Starling (Synecor LLC and Synergy Life Sciences Partners). Cates kicked off the panel by asking what characteristics make an entrepreneur/company successful at the startup phase versus later on. Starling emphasized the importance of culture. Getting really accomplished people around the table who want to do something different is crucial to any startup, he noted.
How important is culture? Once you have product/market fit, Layton said, all that matters is creating a great team—they'll figure it out. DeSimone agreed, stating that diversity is a fundamental tenet of innovation. Different backgrounds bring different qualities to the table.
Soohoo weighed in with another tip for young startups. In the early stages of a company, he said, it's important to allow people to make mistakes.
The conversation then moved on to the behavior of founders, with Susan Cates asking what founders should work on in the early days. Again, “culture” was a key refrain. Panelists also cited product/market fit and delivering a clear corporate mission as important tasks for new founders. As Layton said, “One of the hardest things for a CEO to do with an emerging company is to decide what not to do.”
The idea of product/market fit carried the panel forward, and students asked how a young company can figure out product/market fit. The panelists described the desired outcome of any product as “customer delight.” They listed some telltale signals: Do you wow the customer? Do they want to buy your product? Do they tell their friends about it? When you have customer delight, they said, you'll know it.
The panelists also touched on failing endeavors ("It's easy to tell when [a company is] failing; it's hard to know when to give up"), protecting ideas while trying to convince backers to fund it (“If you're in a business where you can't patent, you just have to be better than everyone else”), and the perks of joining a startup or new company ("When someone offers you a seat on the rocket ship, don't worry about what seat you're in, just get in"). In a track devoted to innovation, it was a special treat to hear from company founders who had paved the way first.
Venture Capitalist Panel
After a short break, students were treated to another panel, this time featuring venture capitalists Tim Haley (Redpoint Ventures), Trevor Oelschig (Bessemer Venture Partners) and Alex Taussig (Highland Capital Partners). In the course of their conversation with moderator Susan Cates, a few themes emerged. Above all else, the panelists seemed to say, invest in the person rather than the idea (which will inevitably morph quite a few times in the normal tenure of a startup). Oelschig stated his preference for entrepreneurs who can convince the public that there's going to be a different world soon and their product fits right into it. Taussig also weighed in about the value of an entrepreneur, but cautioned that it may not be universally attainable. "Entrepreneurship is not for everyone. The number of walls you have to run through head-first is so high," he warned.
The panelists were candid and informative. The session gave me a lot of information about both sides of the venture capital coin; both in how venture capitalists work and what they look for in entrepreneurs and business ideas. —Katrina Benishek, January 2014 Cohort
The panelists also spoke about common shortfalls of entrepreneurs who come into their offices. One big mistake many make is failing to create a sense of urgency around the deal. At the same time, Haley said, if you’re an entrepreneur working with an investor, you want to know that they believe in what you believe in just as passionately as you do, so a VC must remain knowledgeable and fired up about investments. At the same time, they must keep an eye out for the next big thing, constantly innovating. “If we are not peeking over the horizon,” he said, “just investing in trends people know about, VCs aren't going to make money.”
Students asked how new entrepreneurs like themselves might get in to see VCs. It used to be that you needed a referral, the panelists said, but the best VCs have now realized that successful companies come from unpredictable places and will respond to emails and the like. While it is hard to get capital, they said, it’s no longer difficult to at least get your foot in the door. You still need to make a good impression, however. The panelists advised that budding entrepreneurs respect a VC's time and be thoughtful about what else they invest in (that is, do your research!). The first few minutes with a VC, Oelschig said, is the most important part; take that time to “tell the story behind why this company gets you up in the morning.” Above all else, remember that VCs aren’t in the business of lending money—rather, they're putting money at risk, betting that you're going to be one of the ones to win it all.
A highlight of Saturday’s Innovation and Entrepreneurial Thinking track was the VC-trifecta of Tim Haley, Trevor Oelschig and Alex Taussig. And I say trifecta rather than trio because they did not all sing the same tune. They agreed, disagreed, challenged one another and used their unique strategies for identifying, supporting, managing and even terminating talent to illustrate fresh ways of thinking about new ventures, capital or otherwise. I’m not sure what was more impressive—their backgrounds or their relative modesty (and candor) in recounting their successes and failures in the rollicking world of VCs. The VC panel might have been the highlight, but it was not the exception. [San Francisco] was the quintessential immersion: it gave us the opportunity to engage a community of creative thinkers who are changing how we all work, play, learn and lead today, and it allowed us to connect in person with our classmates who will take on this role tomorrow. —Jonathan Stevens, July 2013 Cohort