If you were to start a Venture Fund, how would you do it ? | Women In Finance | Claudia Zeisberger

Summary

In this insightful discussion, the award-winning teacher and respected figure in the private capital space shares his perspective on starting a venture capital business today. He emphasizes the importance of a hands-on approach, engaging closely with entrepreneurs to build successful businesses, rather than adopting the 'spray and pray' strategy. He believes that the key to success lies in forming a team with entrepreneurial expertise and the ability to add value beyond just capital, highlighting the significance of the human element in venture capital investments.

Takeaways

• 🏆 The speaker has won the 'Best Teacher of the Year' award, highlighting their expertise and influence in the field.
• 💼 The speaker is recognized in the private capital space, indicating a strong professional network and understanding of the industry.
• 🚫 A clear rejection of the 'crossover funds' model, suggesting a preference for traditional venture capital approaches.
• 🤝 Emphasizes the importance of a close relationship between venture capitalists and entrepreneurs for successful business building.
• 💡 Refers to venture capital as 'true creative capital' when it aids in the development of businesses, a concept attributed to George Doro.
• 🚫 Criticizes the 'spray and pray' approach to venture capital, implying it lacks the hands-on strategy the speaker prefers.
• 👥 Advocates for building a team with entrepreneurial expertise to better understand and support the entrepreneurs they invest in.
• 🤔 Questions the feasibility of the hands-on approach in the current market, acknowledging changes in private and public markets.
• 💡 Suggests that the value a venture capitalist brings, beyond just money, is the key differentiator in a crowded market.
• 🤝 Highlights the need for an 'educated entrepreneur' who recognizes the value of the venture capitalist's contributions.
• 🔄 Notes that venture capital is still a 'people business' where successful partnerships can lead to substantial outcomes.

Q & A

What is the speaker's view on the current venture capital model?

The speaker believes that the current model, which they refer to as 'spray and pray,' does not align with the traditional venture capital approach they prefer.

What award has the speaker recently won?

The speaker has won the 'Best Teacher of the Year' award as voted by the students.

How does the speaker define 'true creative capital'?

'True creative capital' is defined by the speaker as venture capital that engages closely with entrepreneurs to help build the best possible businesses.

What approach does the speaker advocate for in venture capital?

The speaker advocates for a hands-on approach where venture capital investors support and help entrepreneurs build their businesses.

What type of team would the speaker build for a venture capital business?

The speaker would build a team with entrepreneurial expertise and experience working with entrepreneurs, who can relate to them and provide valuable support.

What has changed in private and public markets that the speaker acknowledges?

The speaker acknowledges that private and public markets have seen significant changes, including more participation in venture investing and a greater amount of capital under management.

What is the speaker's view on the role of money in venture capital today?

The speaker believes that money is no longer a differentiator in venture capital; instead, the differentiator is the value and network that a venture capital investor brings to the table.

What does the speaker see as essential for a successful venture capital partnership?

The speaker sees the partnership between venture capital investors and entrepreneurs as essential, where both parties see value in what the other brings to the table.

How does the speaker describe the current state of capital in private capital markets?

The speaker describes the current state as having more capital and assets under management in venture capital and private equity than ever before, with a record amount of 'dry powder' available for investment.

What is the speaker's opinion on the importance of an educated entrepreneur?

The speaker appreciates the importance of an educated entrepreneur but emphasizes that venture capital is still a people business, and the partnership between investor and entrepreneur is key.

What does the speaker imply about the future of venture capital investing?

The speaker implies that despite the changes in the markets and the increase in capital, the future of venture capital investing still heavily relies on the quality of the relationships and the value provided by the investors.

Outlines

00:00

🏆 Winning Best Teacher and Venture Capital Insights

The speaker begins by acknowledging the receipt of the 'Best Teacher of the Year' award, as voted by students, and their reputation in the private capital space. They are asked how they would start a venture capital business today, given the changing landscape. The speaker expresses a preference for a traditional approach, emphasizing close engagement with entrepreneurs to build successful businesses, rather than following the 'spray and pray' model that is becoming more common. They advocate for venture capital to be 'true creative capital,' as described by George Doro, and highlight the importance of a hands-on approach with a team that has entrepreneurial expertise and can empathize with entrepreneurs.

Keywords

💡Venture Capital

Venture capital refers to the financing provided by investors to startups and early-stage companies perceived to have long-term growth potential in exchange for equity or a stake in the company. In the video, the speaker discusses the traditional venture capital model, emphasizing the importance of close engagement with entrepreneurs to build successful businesses, which contrasts with the 'spray and pray' approach mentioned.

💡Best Teacher of the Year Award

This award is a recognition given to an educator voted as the best by students, highlighting their excellence in teaching. In the context of the video, it serves as an introduction to the speaker's credibility and authority, setting the stage for their perspective on venture capital.

💡Private Capital Space

Private capital space refers to the arena of finance where investments are made in private companies, typically through venture capital or private equity. The speaker is recognized as a prominent figure in this space, which lends weight to their views on starting a venture capital business.

💡Crossover Funds

Crossover funds are investment funds that invest in both public and private companies, often taking advantage of market inefficiencies. The speaker expresses a preference against the approach of such funds, advocating for a more traditional venture capital model.

💡True Creative Capital

The term 'true creative capital' is used by George Doro to describe venture capital that is actively involved in the creative process of building a business. The speaker aligns with this concept, emphasizing the hands-on approach of venture capitalists in supporting entrepreneurs.

💡Hands-On Approach

A hands-on approach in venture capital implies active involvement and guidance in the business operations of the companies they invest in. The speaker prefers this method over a passive investment strategy, as it fosters a closer relationship with entrepreneurs and contributes to building better businesses.

💡Entrepreneurial Expertise

Entrepreneurial expertise refers to the knowledge, skills, and experience related to starting and running a business. The speaker suggests building a team with such expertise to better understand and support entrepreneurs, which is crucial for the success of a venture capital firm.

💡Spray and Pray

The term 'spray and pray' is used by the speaker in a cynical context to describe a venture capital investment strategy that involves investing in many startups with the hope that a few will succeed, rather than focusing on building a close relationship with each entrepreneur. The speaker criticizes this approach as not aligning with the true value of venture capital.

💡Private Markets

Private markets are markets for trading securities that are not listed on a public exchange. The speaker acknowledges the changes in private markets over the years, including an increase in capital and participation in venture investing, which has made money less of a differentiator and increased the importance of the value added by venture capitalists.

💡Differentiator

In the context of the video, a differentiator refers to a unique feature or advantage that sets one venture capital firm apart from others. The speaker argues that in the current landscape of venture capital, the differentiator is not the amount of money but the value and network that investors bring to the table.

💡Dry Powder

Dry powder in finance refers to the uninvested capital that a fund has available for investment. The speaker mentions the record levels of dry powder in private capital markets, indicating a competitive environment where venture capitalists must offer more than just capital to attract entrepreneurs.

Highlights

Winning the best teacher of the year award as voted by students

Being recognized as one of the best network people in private capital space

The changing model of venture capital business

Preference for a traditionalist approach to venture capital

Importance of engaging closely with entrepreneurs to build the best businesses

Venture capital as true creative capital according to George Doro

Criticizing the 'spray and pray' model of venture capital investing

Advocating for a hands-on approach in venture capital

Building a team with entrepreneurial expertise to relate to entrepreneurs

The possibility of maintaining a hands-on approach despite market changes

The need for finding entrepreneurs who value the venture capitalist's contributions

Increased capital and assets under management in venture capital and private equity

The irrelevance of money as a differentiator in today's venture capital market

The value brought to the table by venture capital investors as the key differentiator

The importance of an educated entrepreneur in the venture capital partnership

Venture capital as a people business where the partnership is crucial for success

Transcripts

[Music]

you've also just won the best teacher of

the year award

congratulations as voted by the students

and

are one of the best network people in

private capital space

with all that perspective and background

if you were to start a venture capital

business today how would you do it

that's a that's a really good question

because the model seems to be changing

let me start maybe by saying how i would

not do it i would not do it like a lot

of the crossover funds are doing it

nowadays so i would not be built

another tiger that has made the

headlines recently

and rather a more traditionalist when it

comes to venture capital and firmly

believe that venture capital investors

need to engage very closely with the

entrepreneur to ultimately build the

best possible businesses out there so

they need to be there to help us

entrepreneurs support them help them

build the business

then really venture capital becomes what

uh george doro used to call true

creative capital and um i believe that

the uh nowadays the new model of what i

call spray and pray a bit cynically

um

doesn't quite stack up to that so i like

the hands-on approach of venture capital

so i would build a team around me that

has worked with entrepreneurs before has

entrepreneurial expertise and really

really can

relate to the entrepreneurs on the other

side of the table

um that's interesting do you think

that's still possible today i mean

private markets and public markets have

changed so much

over the years and there's a lot more

participation even in venture investing

um so do you think that's still still

possible

yeah i think it's possible i mean

obviously it also requires that you find

the right entrepreneurs that basically

see value in what you bring to the table

so you're absolutely right i mean we

have nowadays more

capital more assets under management in

venture capital as well as in private

equity with more dry powder than we've

ever had in the history of private

capital markets

but what it also means that money or

investable money is really not a

differentiator anymore what really is

the differentiator is what you bring to

the table as a venture capital investor

so what is your network what is your

value that you bring to the table i

appreciate that that requires an

educated entrepreneur but i find that

you know when those two you know venture

capital ultimately still is a people

business

and when the that partnership works when

one-on-one will ultimately make

significantly more than two

[Music]

you