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Thursday, January 05, 2006

The Question Of The Year...

I was at a New Year’s Eve Party in St. Louis this past week. I was talking to my buddy Pat, and he asked ‘What does it take to be a VC?’ I did not really have a good answer for him at the time, but I have been thinking about this for awhile now. What does it take to be a VC, or even more importantly, What does it take to be a Great VC?

Well, I think I figured it out. I looked through my rolodex of VC friends and acquaintances, there are actually more than I had thought, and found the couple that really are Great VC’s (based on my experiences with them and what they have accomplished in their careers).

The first on my list is Doug Leone, from Sequoia Capital. I know Doug from a few technology conferences and having dinner with him in late 1999 at a Sentient party.

Doug really came from the ground up and is humble enough to be effective. He says his biggest secret is he is driven by fear. I like Doug because he does come across as honest and really does have a great optimistic outlook on concepts and ideas. There are too many people out there that want to shoot down concepts and ideas, and Doug is the opposite. Now, Fear and Optimism seem like a bad mixture for the Venture Captial world of today, but Doug has been very successful. The reason for this is because he looks at everything honestly but is also a pit bull when needed.

Doug sees the challenges and is willing to take them on. It's a war out there, and Doug Leone is ready to fight. Says fellow listee (and admirer) Irwin Federman, "He's very well named [leone means "lion" in Italian] and probably eats five pounds of meat for breakfast. He's very aggressive but also very charming. He didn't leave his killer attitude behind when he left the corporate world."

Doug is a great sales guy and reminds me a little of Gian Fulgoni in that sense. He is a great business man and brings experience, knowledge and optimism to the VC world. Doug also brings self defining honestly, and that is something that is poorly needed in this community.

The second on my list of best VC’s, but actually my favorite is Fred Wilson. I know Fred from his investment in comScore in 1999 and from many interactions on the board. Fred is a partner at Union Square Ventures, and was a co-founder of Flatiron Partners. Fred is a great guy and very very very intelligent. He is one of the brightest guys I have ever been lucky enough to work with. Fred is impassioned for business and about the internet. He is a true visionary and is even better at turning the visions into real results.

Fred’s zealous focus for building and improving the internet is amazing. He walks into a building and you can sense the energy and focus immediately. Every time he speaks, it is something 100% relevant, focused and very actionable. He is a wealth of knowledge and uses this knowledge to accelerate and build upon every single day. He empowers you through his passion and is always looking for a legitimate opportunity for all he is involved with.

Fred is honest with himself and is very focused on where he wants to take this ship. He is very open, and even writes his own blog, that receives over 30,000 visitors per day. He is an amazing guy and someone that you feel is always looking out for you personally. This is a guy that not only has a million things to do everyday, kids, family, investments in billion dollar companies, phone calls, travel, etc... But he also responds to every email you send him, no matter what it is. He cares, and it shows.

So, the answer to Pat’s question of what makes a great VC… The answer is not someone who necessarily always finds the best deal (though I guess this is an important part of it). It is not someone who can push their way to the top. It is someone who finds the great companies and makes them even greater. It is someone who is passionate about the business and empowers the people around them. A great VC is someone who is honest with themselves and also willing to share their experiences and knowledge.

There are 100’s of great VC’s out there. They showcase themselves everyday in their investments and portfolios. The top tiers are those that have great portfolios, and also have empowered their teams to be their absolute best. Both Doug and Fred model this definition perfectly, and I am proud to be associated with each of them.

I hope some of their greatness rubs off on me one day.

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