
Chris Dixon: Things I'd do if I ran a big VC firm - mcxx
http://cdixon.posterous.com/things-id-do-if-i-ran-a-big-vc-firm
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amirmc
Comments on the ones I found interesting (OP's already pretty brief)

 _#1 Lower management fees_ \- Great idea from my outside perspective, but
it'd worth knowing where those fees actually go in the first place. Some of it
might even be useful (e.g spending time networking incurs costs - conference
fees, travel, etc c.f #10)

 _#2 Keep a records of all employees in investee companies_ \- Hmmm, nice idea
but not too sure about the data-protection issues. As an employee, do I want
my company's investors keeping tabs on me? Also, as a CEO, do I want my
investors to keep tabs on my employees? What if we disagree about the
impending death of the company and they try to pre-emptively poach someone for
another portfolio company? (Perhaps this already happens).

 _#4 Have everyone tweet/blog authentically_ \- Not convinced that all people
in firm need to do this. One or two high profile folks should be enough.
Public writing is not easy so leave it to those who want to do it.

 _#7 Have offices that look and cost like startup offices_ \- If you're
running a big VC firm, I'm not sure you can get away with 'startup' offices.
Startup office are cheap because they _have_ to be. Not necessarily because
it's the _best_ way for the company to operate. I see no reason why a VCs
office needs to be anything like a startup's office.

 _#11 Have far fewer meetings with startups_ \- i.e kiss fewer frogs. I don't
think this works. You only get to do this if you're a very well known,
successful VC because then good deals find you. Otherwise you need to be
meeting lots of startups.

 _#14 Use brand to...recruit top talent (particularly engineers) from top
schools [for portfolio companies]..._ \- This is quite interesting, but I
don't see it being particularly successful. People want to join companies, not
necessarily join whatever portfolio company the VC thinks they might be useful
for. It could also complicate the company dynamic e.g who does this engineer
really report to? If there's a dispute, then what happens?

Edit: Removed the ones I didn't have many comments on

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ivankirigin
A summary of a post that is already short and already a list is not needed.

edit: nevermind

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bmelton
Feel free to downmod me, but in defense of the parent, it isn't a summary, but
a rebuttal / questioning of some of the points presented.

Some of the questions raised are interesting, and add to the discussion
considerably.

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ivankirigin
whoops.

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pg
It's interesting what a large percentage of these we do. Almost all of them.

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portman
I had the same thought about First Round Capital.

FRC is one of our company's VCs. I have no insight into their accounting
methods (#9), but they seem to hit all of the others except "have far fewer
meetings with startups" (#11).

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ivankirigin
The financial anatomy of VC firms came as a surprise. It wasn't till I read
"mastering the vc game"# that I understood how fucked things are.

The strucure breeds mediocrity and the culture that founders hate.

Unfortunately, the people that need convincing are investors in VC firms. Bad
returns are the only thing that will convince them. Many regard the category
of VC as doomed to significantly shrink; this small chunk of finance in
general can't support itself. There are more VC _firms_ than successful exits.

# horrible name, good book

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hga
Well, more VC firms than > $100 million exits over the last 10 or whatever
years.

I agree there's plenty wrong (as you'll find with any industry or its
institutions), but I'm not entirely sure you can blame VCs as a whole for
their terrible recent results. Not only does it include two nasty recessions
(the one early in the last decade was particularity focused in the areas VCs
invest(ed) in), but the important of the IPO exit slamming shut cannot be
overemphasized.

Venture capital had a great run from the end of the '50s to the beginning of
the last decade, but rules of the game have changed and so will the industry.
And as you note, most everyone is betting on a significant shrink as one of
the changes.

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imack
I find the tips relating to "VC as Staffing Agency" the most interesting. I
wonder if this stems more from the NYC startup issue of competing with wall
street for talent. If the focus is working for a portfolio company of [X],
rather than startup [Y], it gives some brand cover for recruiting. It also
allows startups to pool resources for recruiting by sending one recruiter to
schools for the portfolio rather than each startup having to spare an employee
for a few days to give a canned talk.

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joshu
Many of these are good ideas that the better vcs already do.

The "own x%" thing has to do with LPs and is probably unavoidable.

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pg
The own x% thing is a consequence of two things: fund size and taking board
seats.

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bravura
Could you explain?

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pg
There's a limit to the number of boards a partner can stand to be on
simultaneously, which means if investment = board seat, the number of
investments per fund is limited. And if fund sizes are big, that means the
average investment has to be big. Which means you have to get a large
percentage of each company to generate the returns you need.

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Harj
while reading this it struck me that we do most of these things at YC.

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tibbon
Most of these sound like pretty good ideas. Most firms probably don't do them
just because they don't have to unfortunately.

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rokhayakebe
_..,and maybe some male receptionists_

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earle
(what I would change) / (why i dont actually run one) != what you you think it
is.

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zackattack
"- don't talk/tweet/blog about your vineyard, yachting, golfing etc while you
tell your CEOs to work non-stop and be frugal etc. "

I don't really get this one. It seems like great advice for the CEO of a
company, but not for a venture capitalist?

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ivankirigin
Most VCs are richer than most CEOs, especially when you consider most CEOs are
in their first startup and haven't made it yet.

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zackattack
exactly... that's my first point: give them something to reach for, the end
game.

my second point is that the VC is not really leadership so the example the VC
sets is irrelevant.

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enjo
While I don't agree with the original point either, VC's most definitely hold
a leadership position within a company. After all they always a board member
and two or three VC's typically represent the majority shareholder block.

I've seen it go both ways. I've seen VC's lead companies to huge exits, as
well as lead companies straight into the ground.

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zackattack
i did not consider the fact that they hold a board position and represent the
majority shareholder block and because of that they have an influence on the
company culture. i was wrong and retract my statement accordingly.

