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How To Bend the Arc of Your Career to VC
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The Forces Behind a Hungry M&A Market
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Sabotaging Code: 1996 NCAA March Madness Pool
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Consolation Prize When You Can’t Raise Venture Capital? Financial Independence
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Great Movies you Never Knew Were About Entrepreneurs
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Give me Integration or Give me Death
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The Longevity of Icons – A Picture is Worth More Than One Word

How To Bend the Arc of Your Career to VC

I am still learning the formula of what makes a great venture capitalist. In an examination of other successful investors and my own numerous deficiencies, I’ve composed a theory that the best venture capitalists are a Jack/Jill of all trades and a master at a couple. Here’s how to bend the arc of your career toward venture capital.

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The Forces Behind a Hungry M&A Market

The M&A and IPO markets for VC-backed companies is hot right now, and there is much attention on the huge wins like Whatsapp, King, Grubhub, and many others.

But there is also a lot of activity at the lower end of the market (exits in $12M – $30M range), and I think there are several prime forces behind these exits that we’ve experienced with some of our seed-stage deals that were sold quickly:

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Sabotaging Code: 1996 NCAA March Madness Pool

I started at the University of Michigan in 1992, right during the Fab Five era. The Fab Five were five freshman basketball players who in 1991, with a totally new coach, went all the way to the NCAA championship. This was unheard of, and the team had a deserved swagger and aggressive style that was addicting. Even if you’d never seen a basketball in your life, if you were on that campus at the time you were crazy about basketball. It was a golden era. It turns out years later they were breaking rules but that’s a topic for a different blog. 
 
As you can imagine, everyone participated in a NCAA pool. My friend across the hall, Andrew Borteck, was an out-of-his-mind Michigan fan and was clearly the guy on the hall who was going to organize the pool for us. Borteck somehow enlisted me to help [it turns out Borteck now works for NBC Sports as an attorney, a fate that could have been predicted in college]. 

Consolation Prize When You Can’t Raise Venture Capital? Financial Independence

One of the hardest things in the venture business is to turn an entrepreneur down for funding, especially one that has invested time in building a relationship.It’s not fun to be on the receiving end of a “no” either, something we are reminded of when we raise capital for our funds.
Not every company should raise venture capital. Venture capital is expensive money. It comes with high expectations that can only be met with very absurdly rapid growth. And not every company can achieve hyper growth. Another way to look at it is that venture capital funds like betting on companies attacking very large and growing markets. This allows for a very high margin of error but also means that if the company is successful, that the value of the company is unbounded. Given the risk of these companies, a big payoff is the only way to get good expected values (and positive-NPV investment outcomes) from the portfolio.

Great Movies you Never Knew Were About Entrepreneurs

Over the years I have stumbled on some documentary movies that were not overtly about entrepreneurs, but turn out to be. They are various portraits of people who have managed to channel their obsession to accomplish great things. 

  • Man on Wire. this movie is about a French tightrope walker who decided at a young age that he was going to walk on a tightrope between the twin towers in NYC knowing that he would never be given permission. The movie chronicles the multi-year preparation of the mission, including recruiting a team to implement his crazy idea. Want to know the qualities of a good entrepreneur? Watch this movie.
  • Joan Rivers: A Piece of Work. This movie made me realize that Joan Rivers is a true entrepreneur. She has worked harder in her 80s than most people work over their whole career. You also get the sense of her complete devotion to her craft. 
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Give me Integration or Give me Death

If you are a SaaS business, heed this warning: Integrate. Or die.

At OCA, we continuously evaluate our investment themes. We look for long-term, sustainable macro trends. If we are right about these themes, it gives us two advantages: (1) our companies will have more margin of error in execution. In niche markets, a company has to execute flawlessly but in large and growing markets fueled by macro trends, you can screw up a couple of things and still achieve a good exit for all shareholders. And (2) once educated in a theme, there are great economies of scale in due diligence, exits, recruiting, deal sourcing and other areas.

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The Longevity of Icons – A Picture is Worth More Than One Word

One of my biggest issues with iOS7 is that Apple is fairly inconsistent with the use of iconography vs. text. Take the email app, for example. If you swipe left in the listing view, it gives you options using text like “Trash”. But in other instances (like looking at a specific message), there is a trash can icon. Even though it didn’t need to use icons for screen real-estate purposes, iOS6 used icons more often and more consistently. Icons transcend language and makes translating an app into a different language a much easier endeavour. I have always admired LEGO instructions since they never need translation. Why can’t software be the same?
 
Icons are much more powerful than using words. Some people’s associations with icons are so strong, that even after the obsolescence of the item the icon is depicting, the icon persists. What icon do you click to save a document in Word? A diskette. When was the last time you used a 3.5″ floppy disk? My kids, the oldest of whom is 8, all know that’s what you click to save but they have never seen a diskette in their lives (and may never). 

Copyright © 2014 Jason Heltzer