

Ask HN: The VC and the Geek.  Do VC's only care about 'management team'? - robotrout

My understanding, based on nothing but some reading, is that as an engineer, I have zero credibility when it comes to VC's.  They see me as something like a janitor or an electrician, or any other skilled craft.  "You need them, but which exact one you get doesn't really matter."<p>My understanding is that VC's don't invest in technology, or in engineers, they invest in management teams.  You need the resumes in your portfolio that have letters like 'MBA' on them, instead of letters like 'EE'.  I assume if your letters were 'PhD EE', that might compete with 'MBA' ... barely.<p>I have used this knowledge as an excuse not to even try to get VC money for any of my projects that currently languish in notebooks due to lack of capital.<p>So, my question here is ... Am I wrong?
======
sama
VCs invest in founders, not management teams. Some of the good ones have a
strong preference for those founders to be engineers.

Most of the most successful VC investments have been backing very smart
engineers. This pattern is not lost on them.

~~~
robotrout
citation please? While this is sweet kool-aid, and I like the taste a lot,
this is in direct opposition to almost all VC websites that I have read.

I expected this answer, posting here. I WANT this answer. But I need more. I
need convincing that the VC sites are wrong.

Here's links from a one minute google.
[http://www.smallbusinessnotes.com/financing/venturecapitalde...](http://www.smallbusinessnotes.com/financing/venturecapitaldecisions.html)
[http://www.markpeterdavis.com/getventure/2008/08/hi-mark-
big...](http://www.markpeterdavis.com/getventure/2008/08/hi-mark-big-fan.html)
[http://209.85.173.132/search?q=cache:HQ8zeI6-mXUJ:www.va-
int...](http://209.85.173.132/search?q=cache:HQ8zeI6-mXUJ:www.va-
interactive.com/inbusiness/documents/MAN_VC1.doc+%22management+team%22+vc&cd=5&hl=en&ct=clnk&gl=us)

... and so on. I have a bookmark folder filled with these somewhere, but for
now, you get the idea.

~~~
sama
NEA and Sequoia funded us when we were 20 year old hackers with NO business
experience whatsoever.

~~~
robotrout
Would you agree that most 20 year old hackers are NOT funded?

Why do you think you were funded? What made you different from those who
didn't get funded from those companies? Was it your demo? Was it a patent?
Just an idea that was so brilliant, no demo, patent, or experience was needed?

I'm very interested in any introspection you might share, as to why you got
funded when others did not.

------
pg
Only bad VCs are looking for startups founded by MBAs. The better ones are
looking for people with technical backgrounds who are willing and able to
figure out how business works.

~~~
robotrout
Right. Good! Am I going to argue with pg? If I could ask you for one more
comment...

Most consumer electronics products that you see on store shelves are not
patented. They're not sufficiently innovative to deserve one. That's also the
case with my portfolio. I have a few pending patents, but as far as legally
defensible IP, not so much.

My idea is to select perhaps 10 products, complete with photos of prototypes,
and/or schematics, as well as trademarks that I have reserved, domain names
associated with those trademarks, the few patents I have, and my resume, I
guess, and create a package I can give to VC's.

Then, in the package, select one of those products as a "first product", and
present a timeline and budget for bringing it to market.

Is this something that could fly?

~~~
pg
VCs don't generally want to see a portfolio of ideas. You're supposed to be
the expert: they expect you to choose. What they want to see is a group of
smart founders who plan to work in a promising area.

Also, they're generally leery of consumer electronics. Not that you shouldn't
do that, but if you do, you should do it a la Meraki: make version 1 yourself
in your basement, get ramen profitable by selling it to early adopters, and
_then_ go to VCs once you can show it's already taking off.

~~~
robotrout
Thank you for telling me that probably would not have worked, and about the
reluctance regarding consumer electronics. It makes sense they would be so,
for the very reasons that are hindering me. (high initial investment, IP
infringement risk, multi-country compliance, etc).

------
kanny96
I agree with your thoughts. It is sometimes difficult to digest not getting a
fair opportunity, but after all, the world outside the school is not, well,
the school. I also have EE background, with .95 PhD, and despite being ahead
of the tech horizon, it's especially painful to be rubbished by some haphazard
investors.

However, i am sure, if i put my full energy behind it, someday it will
certainly fly with or w/o VCs on board. So, the real key is perseverance and
commitments. And of course, finding like-minded or like-positioned people
helps getting there.

------
pedalpete
I believe you are wrong. It isn't about degrees as far as I understand, but it
is about the ability to sell the idea, manage it through production and
growth.

When a VC says they fund a team, they don't mean they fund degrees. Funding a
team will often mean funding people with experience, or some other factor that
lets the VC know that this is the right horse to back.

Lots of engineers get funded, but they don't get funded for 'projects that
languish in notebooks due to lack of capital'.

So that's the problem first. You need to be able to sell your idea, and likely
you should probably be on the road to building it or have something built
before looking for funding.

Pick up Curtis Carlson's book "Innovation: the Five Disciples to Creating What
Customers Want". It will help you put together the proper positioning for your
idea and get it ready to be heard.

\----- EDITED ----- I REALLY liked Sama's response (which wasn't there when I
wrote my original response above).

My response is probably focused on steps. You can't go right from idea to VC
(unless you have some serious connections and likely some very serious
successes in your past as well).

An idea is just an idea. It is a management team (which _might_ need a good
engineer) which brings the whole thing together.

Rarely (though it does happen) is an engineer the best person to lead a
business. Think Apple - Woz was the engineer, Jobs the manager/marketer. You
might need to find your Jobs if you're Woz (okay, that's not the way the
history works, but you get the jist).

By the way, I'm in your boat (kinda) I'm the engineer of my start-up and also
trying to be the management guy. It's tough going it alone, once you're in it,
you'll likely understand why VC's focus on the team aspect.

~~~
robotrout
I get that if you don't try, you won't succeed, hence my questioning here, as
a way to jump start myself, perhaps.

It does sound a little silly, doesn't it. Here's some guy claiming to have all
these ideas in a notebook, but he's obviously not trying to do anything with
them, or they wouldn't just be in a notebook.

I have developed mass market consumer electronics for many years, for large
companies. I simply want to continue to do that, for myself. I know, from
actually doing it for many years, that $100K is very cheap, and $300K is
normal, by the time you get plastics designed, molds tooled, PCB's and
components purchased, etc. As your complexity goes up from there, so do your
costs. Then it's time to actually go buy components, arrange shipping, and
have the thing manufactured. Some things do not bootstrap. You either write
the check or you don't, period.

These products will not change the world. They're not revolutionary, and
frankly, the world will get by just fine without them. But there is money to
be made from them, as people will buy them.

So, here I am, with experience and ideas, but a strong feeling that I can't
close the deal, based on a lot of reading that I've done.

~~~
jagjit
The best thing you could do if you have really been reading carefully is to
get started on building what your idea is. And VCs may not be what you need -
if you really believe the products would sell you could try bank/credit card
loans etc. It is not as if there was no entrepreneurship before VCs came into
picture. With or without VCs, with or without certain degrees from certain
schools, entrepreneurs will always be there and keep finding ways to chase
opportunities they believe in.

~~~
robotrout
Well said brother! While I'm not certain I'm willing to put $300K on credit
card, I know there are people who have done this.

I agree that there is never an excuse, you just have to try a different way,
till you succeed.

