A Young VC – Destined for Failure?

My friend, and blogger extraordinaire, Mark MacLeod wrote a post today about whether you would take money from a 28 year old after Matrix Partners named Jared Flieser a partner. His overall opinion is that he would not take money from a 28 year old or, to extrapolate from that, a young VC is destined for failure.

I struggle to see a correlation between age and succes in VC. Some VCs have had better track records when they were younger. Some get better with age. What is more important, and LPs understand this, is having a great mix of partners in a fund and that includes a mix in age. Benchmark is religious about this and recently brought on a 30 yr old partner in Matt Cohler. Bill Gurley wrote an excellent blog post about why Benchmark has this philosophy and why youth actually has an advantage in innovation.

Baby PictureIt is also very important for a fresh, young VC to have tremendous support from his partners. I don’t think that Jared will be left on his own to figure things out, but rather receive tremendous mentorship, guidance and support from the other Matrix partners. Personally, I didn’t have intentions to pursue being a VC until I was in my 40s and had apprehensions about getting in to it while still in my 20s. However, in the end I saw the support, mentorship and opportunity the partners at iNovia were committed to giving me. Most people also don’t understand how hard it is to get in to venture capital. Some of my mentors I respected the most told me that if I passed on the opportunity it could be a decade, or never, before I saw another one. I don’t disagree. Still, it has to be the right fit and you have to make sure you are not setting yourself up for failure.

Lastly, while VCs are looked to for answers, guidance and advice I have learned that a teacher-student relationship between an investor and entrepreneur is not a necessarily a healthy thing. I have also learned that the best VCs are better at asking the right questions, not necessarily always trying to have the right answers. The best entrepreneurs I have had the privilege to work with don’t want to be told what to do – they want to be held accountable, get asked the hard questions and have their investors/board empower them at every opportunity.

I still believe that it is a very steep learning curve being a VC – not only in making great investment decisions and adding value to companies, but even in all the behind-the-scenes work that never gets talked about (admin, LPs, fundraising, etc.). This can take years and with the long life of funds it can take a decade before you even know if you are good at it or not. I think a young person can succeed, but they have to come in with humility and a massive appetite to learn. I love Bill Gurley’s line of being a “Learn-it-All” rather than a “Know-it-All.” The best VCs I know never stop learning.

I believe that a younger person can succeed as a VC, but it is like drinking from a fire hose. Then again, I am completely biased.

  • Hi Kevin, 
    Good post. I believe the key question to ask “is diversity important in the VC game”. I know organizations thrive both financially and culturally when they are exposed to a diverse staff that consists of a wide-array of personality types, competencies, life and work experiences, genders, nationalities, etc. I would argue that ageism or the pre-conceived notion that age is a limiting factor only holds true if the potential of an individual is never realized. Similar to professional sports, organizations need take risks on the potential of young blue chip recruits .. sometimes it works, sometimes not. But if your organization fosters a diverse culture where everyone works hard to provide value and their is an underlying willingness to learn and improve – age doesn’t matter. I actually value VC firms based on the diversity of their partners/associates. If it’s all silver foxes (grey beards), I run. 

    • Most LPs would agree with you, Rob. It also helps in succession planning for VC firms. However, I think the only way it works is if the more experienced partners are willing to invest the time and effort in mentoring the younger individual. If left to sink or swim I am pretty confident what the outcome would be.

      • Yeah you’re right Kevin. The odds really are against younger professionals that don’t receive the type of guidance needed from the more experienced/senior partners. Throwing them into the mix and hoping for success, is pretty much a telltale sign of failure.