Andrew Romans (7BC Venture Capital & Rubicon Venture): Our basic rule is if we cannot add value, we will not invest - Unicorn Nest

Andrew Romans (7BC Venture Capital & Rubicon Venture): Our basic rule is if we cannot add value, we will not invest

By Vanda Vovk

03 Jul, 2020

Andrew Romans (7BC Venture Capital & Rubicon Venture)
Andrew Romans (7BC Venture Capital & Rubicon Venture)

Andrew Romans is a General Partner at 7BC Venture Capital and Rubicon Venture Capital. During his career, he was a founder and the CEO of several VC-backed tech ventures as well as a successful investor. By the age of 28, Andrew raised $48m+ for the startups he founded. Andrew Romans is also an author of books on VC, FinTech and digitalization of workflows. He also serves as an advisor to governments and corporates on VC, CVC as well as FinTech.

How did it all start? How did you decide to enter the venture investment business?

I’ve been an entrepreneur my whole life. I had little businesses running in high school and college. And then I stumbled into the computer business where my first job was in the Unix industry. And then I got into telecom. I was even building telecom networks in places like Bosnia and Herzegovina right after the war, rebuilding the country. But I was also building telecom networks in the UK, in the Czech Republic, in Austria and Germany.

I had an idea for a business then and I decided to start a company. So I started a company that didn’t have any investors and was actually making a lot of money. I then decided to raise money. I decided to buy some telecom switches, and so for that, I raised 15 million dollar series A and 25 million dollars when the financial limit was loosened. And then we went through lots of VC funding rounds. So I felt as if I’ve met every venture capitalist that was alive and active in the IT and telecom space in the mid to late 1990s and early 2000s. And I guess, from there it was almost like I was infected with a virus, there was no going back to large corporate life or anything like that. I knew it was going to be just all startups for me until the end.

I did move to the VC side a few years later, and that’s where I kind of excelled. What’s nice about being a VC is that you can basically be an entrepreneur, but involved in many businesses at the same time as opposed to dedicate yourself to just 5, 7, 10 years at one startup, and then do another one.

So you’re a General Partner at two different funds. What is the difference in their criteria of how do they select startups to support?

Rubicon Venture Capital is typically looking for startups that have a minimum of $1 000 of monthly recurring revenue, so a little above 1 million annual recurring revenue. That’s late-stage seed by California standards. So we would get them to a series A where the revenues typically these days are around $500 000 of monthly recurring revenue. There are lots of exceptions to this, but generally speaking.

Now you’re looking at about 6 million A round annualized recurring revenue for these companies. And that’s where we put most of our money. So we’re really highly diversified across 25 or so companies with the late seed and we’re little more concentrated with much bigger checks into the ones that are hitting series A. Sometimes we put a little money after, but Rubicon is mainly focused on that series A.

7BC is starting in the COVID climate, being a bit more conservative and investing more into series B rounds. So we’ve been a bit of a more growth-stage investor, being a bit more cautious, but 75% of our money is meant to target series A investments at 7BC. I think that’s the greatest risk-free wide inflection point: it’s relatively little risk, and still very high reward, you can expect to see values go up very quickly. But I think that if you expect to land into 25 red-hot-rockstar-series A, you’d better be active and involved before that, so about 7% of our capital goes into pre-series A at 7BC.

If the economy improves, which it will, we’ll get a little earlier, but for now, we’re holding that to 100k MRR. So we want to see companies that have basically around a million dollars of revenue and are starting to take off like a rocket.

And what industries are you interested in?

7B is a bit more focused than Rubicon. We’re most passionate about automating human tasks and digitization of human workflows. In a way, COVID is an accelerant to human migration towards digitizing more workflows. And this is all the way down to if you need a Visa to go to China, this should just be the way it is getting a Visa to go to Turkey. You go to Turkey, and it takes 2 minutes, and you do it online, and you’re all set as opposed to the government, education, healthcare, and all business being insanely paper-based even though we’ve got the internet. And all those business decisions are made largely without real data. And we’re not using so much data, but you need software to canvass all these different sources of data, even though Google search is done very much caveman/neanderthal to me. I think that Google is not accessing different sources of data. The data is not available for Google to even attempt to search, and the way their search works is very 1.0. So this basically means artificial intelligence and machine learning.

So we’re very passionate about AI and machine learning as it points in the direction that I’m talking about. We think that in industry, where we can create very rapid revenue growth, very high revenue, super-profitable companies that’ll be multi-billion-dollar companies, is in the financial services. Financial services have always been afraid of the internet. I remember when bankers were not allowed to have email addresses because nobody wanted information to get into these fortresses for fear of cyberattacks. And that was the initial response to the internet and email. So if you apply technology to financial services, there’s just so much money to make. And my energy level goes up when I see businesses that are just taking off like a sheer rocket going straight up.

So financial service is a big area for us to get involved in. And a third core area, a passion area, that we call it, is software infrastructure. We think that there’s a lot of companies that don’t exist yet but can surely be railroad infrastructure for things to work. So basically imagine all the data that’s in silos and having an infrastructure to un-silo that data, clean it, process it, and serve it up, so that anyone without any technical skills can be making a kind of instantaneous decisions, even automating some decision-making that says “You get your Visa to go to China. Boom!” And it’s incredibly more sophisticated than have Visa selection in our location as done today. And we’ll just make the world a better place with that getting your Visa painless as opposed to being very painful of how it’s done today, not to mention expensive and just bad productivity and things.

So those are three areas of focus. The fourth bucket is picking up after Rubicon. Rubicon is making its final investments, and we’ve decided to not raise another Rubicon fund, so 7BC is basically positioned to have Fund III dynamics, and we’ve poured about 2/3 of our investments already into Rubicon portfolio companies. And so these are basically more b2b SaaS companies than b2c, but some of our best investments, like Superhuman, which is a b2c company primarily. I guess it’s b2b and b2c, but it’s one of my favorite companies, favorite founders and teams, and CTOs, and amazing corporate culture. It’s an example of the founder proliferating into everybody who works there. So we don’t want to miss out on those kinds of deals. So Daily Harvest is b2c, Super Coffee is b2c. So there’s a couple of companies that clearly are on a path to be a multibillion dollars companies. And our basic rule is that if we cannot add value, we will not invest. So basically AI, Fintech, software infrastructure with about a third of the fund reserve for a bucket of ITC. But it’s almost rare that the companies don’t have some elements of those first three.

Do you have any geography restrictions for the startups that want to be founded by your funds? 

I think that entrepreneurs can be born anywhere, and COVID-19 is an accelerant to decentralizing things. Almost all the startups are stopping for office rent for now, and people are going to work from home more. And it’s even changing the real estate industry for people that serve startups and corporations, that few people want to be on a Google bus, a luxury bus bussing into mountain view or Genentech in the South San Francisco. More people are going to work from home a little bit and then go to nearby offices of that Google. So Google is going to become more distributed.

But for the venture capital industry right now it is somewhat centralized that if you invest in a company, for example in Ukraine, let’s just say there are 5 different VC funds exist that are operational around the series A level in Kyiv right now. So you have 5 VCs, and there might really be 1 or 2. And it’s kind of like you go to a disco to meet somebody, and there’s only one girl in the entire disco. If she doesn’t like you, what are you going to do? Let’s find a better bar to go to. If there’s only one girl who already hates me – what am I going to do in there?

So Silicon Valley has the most VCs. Peter Thiel once told me that 70% of all unicorns in the United States are in Silicon Valley, and then 12% are in New York. That’s 82% are in Silicon Valley and New York where we have our offices. If we invest in a company, and now we’re trying to get another fund to invest in a company at a higher valuation with a bigger check to really fuel the growth and reward them for the progress they’re making, it’s nice to have hundreds to go to. And the first 25 all say ‘no’ or ‘come back later’. So nobody’s ready to take the lead. And literally it’s around meeting №60 that it’s starting to work.

Now, all companies will tell you “Oh! We’re still hot. Everybody wants to invest in us.” But the truth is you want to be able to get rejected many, many times before somebody invests in it. The other thing is you want to always have companies trying to buy you. This happened with all my companies when I was an entrepreneur. Somebody was always trying to buy our company, and that gave us the confidence to keep raising capital. We could demonstrate that to the VCs, and the VCs were saying: “Well, Telefonica wants to buy the company for 50 million of dollars, I don’t feel bad putting 10 million on a 40 million pre, that pre-evaluation because it would appear that we could exit off this escalator at any minute to Telefonica.” And if you are in Kyiv, you’re kind of got that one girl at the disco set up with the VCs, and it’s hard for the big balance sheet buyers that do most of the M&A to buy you.

I heard the statistics once that is probably true that said that 84% of all European venture-backed startups. That would include London, Paris, Berlin, and everything, that 84% of the companies that go M&A are acquired by US-domiciled buyers. M&A is the most common positive outcome for a venture-backed startup. IPO is very far in-between, very few companies go IPO, it’s mostly M&A. And most of the venture-backed startups from Europe are getting acquired by American buyers. And that makes sense when you figure Oracle, Google, Facebook, HP, Adobe, Microsoft, who buys the companies – it’s almost all West Coast companies. There’s not even that many East Coast buyers by the numbers.

And so by being in Silicon Valley with at least the CEO here we’re able to socialize constantly with investors. So it’s good to network a lot, and this is driving me crazy with COVID, that I’m not out 2–3 nights a week, having lunch and breakfast every day and back-to-back meetings in a hotel and all that.

It’s very risky for us to invest in an ecosystem that’s not designed to make sure the startup does not run out of money. Running out of money is a №1 cause of death. And so I think that this is important even in the post-COVID world that startups have access to the well-developed ecosystems.

We also don’t invest if we can’t add value, and when the time zones are really harsh, it gets more and more difficult to be around. So the general rule for me is: the more early-stage the company is, the more it needs to be physically close to our office. Right now we have offices in Silicon Valley, New York and London, and we actually have operations in China, Hong Kong, but we’re not really talking about that yet.

So for us, it’s unlikely that we would invest in a company in Europe unless it’s pretty late-stage these days. So we’re not investing in early-stage. If the companies move here, then it’s game-on: we’re ready to deal with companies that are here. If they’re engineering in Ukraine, that’s even better. I think that Ukrainians are brilliant people and there’s a huge infrastructure there, it’s easy to hire and scale. It’s getting more expensive, but it’s still cost-effective compared to people living in a 2 million dollar garage in San Francisco.

What’s your opinion on COVID-19: Is this a threat or an opportunity? How are you going to react to this situation? Will you broaden the investment mandate or you stay conservative?

VCs make a lot of money in a booming economy, when everything’s going up and to the right, and valuations go up very quickly, and VCs can sell some of their positions on the secondary market when people sell at different times. We like to see a billion-dollar valuation before we would sell anything on the secondary market. But it could argue even more money in the economic downturn. When the economy goes south, a lot of companies want to immediately tank up for a 24-month runway. So in economic boom times, a lot of startups will say “I’m going to run out of money by December, and it’s May right now when we’re talking. I can very calmly continue to grow my sales, aggressively spend money, while I’m going to zero very quickly and start a fundraising process in September or the end of August when kids go back to school and have my financing done by Christmas.” That’s a normal setting. With an economic downturn and extreme government-imposed lockdowns, a lot of startups are saying: “I want to immediately tank up with a 24-month runway.” That means that they’ll come to VCs like us and say “Do you want to invest in our startup?” And being honest, there are also VCs that have been around for 30 or 40 years, and startups might prefer to be founded by Sequoia than by 7BC. Whereas in COVID days, when we say “We’re ready to invest over Zoom and we’re active, and we have money, thank God,” we’re getting into deals that might have been harder to have gotten in when everyone was meeting in person.

So there’s almost a once-in-a-lifetime opportunity right now to invest in companies at sort of the last valuation or a conservative valuation, while the startups are reducing expenses, they’ve stopped having lunches and limos or whatever crazy stupid spending. So you’ve got conservative spending on the startup level, you’ve got conservative valuations, you’ve got everybody trying to take the risk out of the future by extending the runways and bracing more capital. So it’s a very active time for VCs right now to be getting into high-quality deals at reasonable valuations and come together like a family to all get through this together and try to protect people from losing their jobs. Even if it means some pay cuts and some reductions, especially at the senior level.

We believe it’s going to be a kind of a W-curve, and we’re already coming out of lockdown in most of the world. Silicon Valley, unfortunately, it still in lockdown (the interview was held in May). Elon Musk is opening up Tesla against Alameda County’s restrictions, it’s kind of crazy. But one would expect that there’s going to be pretty good recovery, then another bump, maybe with COVID comeback absent of vaccine or Chinese solutions of tracing – there’s no tracing at all in the US.

So we’re going to go up and down a bit, but one can expect that by the time we exit these investments, there will be a vaccine, and we’ll fully recover, there’ll be herd immunity. So it’s a pretty good bet to say we’re going to invest in a company with at least a 2-year runway, and that they could even raise more capital by being part of this ecosystem. And we’re going to exit at valuations when the economy has recovered. So that’s an amazing opportunity that the valuations came down and we can exit at a better valuation. Some of the investments we’re making right now are of higher valuations than the previous round because COVID has seemed to become an accelerant for the success of these companies.

Some of the companies are badly hit by COVID, and some are benefitting from COVID. I was just reading an update from Partender, one of our portfolio companies, from Nick, a cool CEO, and they service the bar in the hospitality business. And the only one that has been hit worse than them is a cruise line, and yet I don’t think the company has fired anybody, they’ve managed to keep the whole tribe together and they’re preparing for this grand reopening. So they’re working around the clock, they’re super excited, they’ve been busy talking to their customers. And even they are like “Woo-hoo, grand opening, we’re back!”

It’s annoyed me from the beginning that all people can think about is COVID. When you see these family offices or these idiots that do these pitch-battles on Zoom, they only want to hear about a COVID-testing company. That’s just so myopic! I mean, it’s uneducated to even behave that way. It’s been exciting to see COVID accelerate things. It’s almost crazy that Bezos is making so much money, that some mum who would’ve bought a vacuum cleaner at Target and gone down to the store to buy it, she’s now buying it on Amazon, for the first time saying “Wow! It’s cheaper, better, and it got delivered to my door. Should I go back to Target later?”

So digitization of everything is accelerating as a result of this. It is good when there is uncertainty about the economy, there’s uncertainty about international travel. I don’t know when I’m going to be able to fly to Hong Kong and Jakarta, even though I really want to.

What a startup should have to propose to catch your attention?

I’d say to get our attention the best pitch right now is one that was thriving before COVID, it’s doing arguably better during COVID, and that will increase its pace that when COVID is over, they’ll have a stronger installed customer base and people are aware of the company to go even better and be highly successful.

At the end of the day, we’re looking for companies with strong management teams, very strong, unique technology, and a technology lead above their competitors that have enough customers to help us believe that the technology works and that the thesis has been somewhat tested. And when we put the check-in, that’s the small part that when we get involved and start introducing the company to large corporations and distribution partners and other startups that can partner with them or even embed their technology into their company, that it’ll work. And not be a binary experiment that’ll take 5 or 6 years to figure out if the thesis is a ‘yes’ or a ‘no’.

I guess it goes back to right now we’re looking for companies that have at least a million dollars of revenue and are growing very quickly.

How many startup projects do you review per year?

Thank God I invested in Superhuman which helps me with my email, that I have a couple of standard replies to the avalanche of startups that email me. I’m unable to process the LinkedIn messages. I used to have an intern looking though those and I should probably start that again. There might be something in there that I’m missing. But if I told the investors in my fund how many emails we get, it might scare them. Like when I spoke at Startup Istanbul, there were 6 000 people in the audience, and I’ve got a couple of thousand emails within 24 hours. And almost none of them – none of them – even met our criteria. I also go to Y Combinator Demo Day, that’s something like 210 companies that pitch twice a year, so there’s 420 right there, that’s nothing. We go to as many demo days as we can, we’re trying to track these companies year after year after year. So we’re tracking thousands of companies that we’ve met already or seen pitch or done a conference call with going back years. That’s almost a more interesting question: how many companies are we tracking compared to how many emails do I get? People email me from Sri Lanka and all over India.

Then what is the best way for companies to reach you?

I’m not opposed to people emailing us directly, that’s fine. But it’s much better if someone that I know and respect is vouching for the company and saying “Hey, Andrew, this is a really good company,” and it’s a lawyer who’s been in the business for 25 years, knows everybody, is involved in 40 venture financings a year as a top corporate securities guy. Or it’s a banker or it’s the CEO of Superhuman, who I’ve got a strong relationship with, one of our own portfolio companies and another VC. I like it when another VC says “Hey, let’s meet for lunch,” and during the lunch, they say “These are my portfolio companies that are raising funding rounds,” and we get into a deep-dive discussion on them. That’s a great way to email.

The worst thing is when I get an email that doesn’t tell me the geography, the stage, how much revenue they have and what the funding history is. I wrote a blog post on How to email a VC, but if you recognize the volume of emails they get, and sometimes it can be over a hundred emails to go through in one day. It’s like working in the emergency room in a war zone where soldiers are being brought in all shot up, you’ve got to really quickly decide where to spend your time.

So when I get an email that’s long, and they don’t put in the early pages of the deck how much fund they have raised so far from non-founders, how much revenue does the company have, what’s the team and where it is located, it’s very frustrating. So sometimes I’ll pass on the deal without making it through all 47 slides. There’s no time to look through 47 slides. The startup should try to grab your attention in 5 seconds. So you’ve got 5 seconds to grab the attention for the next 10 seconds or the next 30 seconds, and within those 30 seconds, you want to grab their attention for 2 minutes. Because the most thing is to get the gong within a few seconds.

If the startup is introduced through someone that I know, then I’m thinking “Well, he introduces consecutively really bad deals,” and I know people that introduce such bad deals that I’ve used my Superhuman to block their emails. Because I know that from that person it’s something that I really hate. You know the back “Please only send the deals like this,” and they keep sending the bad deals. And so I’m improving my ability to spend time on the good ones by completely cutting out those.

What is your due diligence procedure and how long does it take you to cover the whole way from the first meeting with founders to contract and check signing?

I like to think we can move quickly. If you move too slowly you get the reputation of being a dysfunctional corporate venture capital unit that needs a business unit to sign a memo that they’re not going to invent it themselves, they’re going to give the contract to the company. And slow speed is bad for a fast-moving deal in the Valley. So I like to say that we are efficient and can make a decision very quickly. Typically deals take a little bit of time. I like to think that we can take two weeks. And sometimes we make a decision and we commit to financing. Right now we have committed to financing that is a 20 million dollar financing, and the first close had to be a minimum of 7.5 million. And we committed right away to that because I was already an investor in the company, so was the lead investor, we’re really good friends with the lead investor, I feel like I knew everything about it. That’s not fair: I’m making a new investment, it typically gets two weeks to do due diligence. It depends on each individual deal. If there’s a lot of history for the company, there’s a lot of information to review. Other ones have been around for a short period of time, and there’s not that much due diligence: you’re either going to do it or you’re not.

When I was an entrepreneur and a VC would ask me a list of questions, I would answer the questions, and then they ask me more questions, I answer that, and they ask me more questions, and then I say: “When is this going to end? I’m not getting paid by the hours to answer these VCs questions, this is very frustrating.” So I try hard to get one list of questions.

Sometimes the entrepreneur starts hiding information and not giving a direct answer to the question, and then I start to say “Maybe I’m not going to invest in this company. They’re trying to deceive me and delude me into investing in the company and they’re trying to hide the full story.” And so I’ll make a quick decision to back out of that deal.

If the entrepreneur does a good job of answering our questions on the first go in writing, then it can trigger maybe one more set of questions because their answer generates a new question. And then I try to make sure that that’s it. It’s kind of two volleys of questions. A lot of entrepreneurs work long hours and stay up late to get to your answers, and sometimes you might have to get on the phone and walk through the excel financial model again. But I’d say it’s 2 weeks. 

What are your other red flags, besides the entrepreneur trying to hide some information from you?

I think that’s a good point to spend a little more time on them. I almost think that accelerators these days are training the entrepreneurs a behavior that I think is destructive. Ask yourself, how do you feel when you discover someone is lying to you? They told you one thing here, they told you another thing here, so they were either lying first, before, or they are lying now. And if you catch them in this more than once, don’t be surprised if things are not as they seem.

We’ve had bounders that we’ve invested in, and we’ve invested again and again, and we discovered later that they’ve been lying to us about things like how much cash was in the bank. We’ve even had founders photoshop bank statements. We’ve had founders tell people “Pretend that you are you are my customer and you work at Airbnb, and you’re going to get a call from this guy, Andrew Romans, and you tell him that the trial and the PoC converted to an enterprise contract and you’re a happy customer”. And then he was also doctoring and making false bank statements in PDF format and sending it to us.

So it’s hard to protect yourself against that. But I don’t like to be lied to. And I think the accelerators are partly to blame that they’re training people to try to create a fear of missing out, FOMO, so founders are now trained to lie about where they are in their funding rounds. We know it’s hard to raise money during a lockdown when there’s no international travel or face to face meetings, even locally, and founders to say “Oh, this is the best who’s in for 50%, this one’s in for 25%, existing investors are in, the round is oversubscribed, but we like you, so we’re going to let you invest in.” And you find out that they don’t have anybody committed for real. And if you say “Okay, but give me the names and phone numbers of the other investors,” and then they’re not willing to do that, it’s very frustrating to me. I think it’s okay to tell the truth and we’re trying to fix hard problems together. And if we like the deal, we can introduce it to other investors and help you fully subscribe that round.

So I would say finding out things that are not true is probably the biggest red flag. It’s hard. I respect that some people are too proud to tell the truth. Or they’re frustrated: they’ve been working for years, and things are still not coming together. But it’s expected to be an uphill battle.

And how big is a check you usually issue?

Rubicon is making final investments, and it’s mostly follow-on investments into the existing portfolio. So I’ll talk about 7BC. We’re typically looking at up to 5 million dollar round for series A, so our hope is that we can lead around and say “7BC is committing 5 million dollars as the lead agree on terms,” and then we can make a list of other VCs and send it to those VCs ourselves. And they can reach out to VCs they’re in touch with. And do on that investment banking to work with them on that. To get that round done we can also make smaller 250 thousand dollar investments as part of a broader syndicate where we’re not even thinking or worried about what percentage of the round we are. On some series A rounds we could go as low as 250k, but it’s better to do at least 500k or a million to join the syndicate that’s making room for us and playing nice.

A lot of VCs are obsessed with their own target positions. We’re more obsessed with what percentage of the fund is what stage and what kind of return we can make. We rarely write a check without the belief that we can make it 10X return, even considering future delusion of future financing rounds. So for investing at a 50 million dollar valuation, we would want to believe that the company can be sold for at least 500 million with no funding rounds to make it 10X return. And if you’re experienced, you know that there’s going to be more delusion when they issue more shares to new investors and higher valuations. If you’re coming in at 50, you’d have to plausibly believe this company can be sold for 750 million within a couple of years. So we’re more looking at these kinds of things.

I know you wrote three books, can you tell a bit about them? Are there any other books you can suggest to startup founders?

If you go to Amazon and you type in my name, Andrew Romans, they come up pretty easily. For the first one my publisher came up with a tittle, which I don’t love, which is ‘The Entrepreneurial Bible to Venture Capital: Inside Secrets From the Leaders in the Startup Game’. I think it’s a pretty good timeless book. For that book I interviewed Tim Draper and 50 other VCs, Brad Feld, a bunch of great CEOs, even lawyers and some bankers, some M&A Corp Devs. I’ve interviewed one of the original M&A guys at the Corp Dev team at Google that buys companies, so talking about how to sell your company to Google and what to not do when you’re selling your company to Google. So there’s a lot of dos and don’ts and there’s people telling stories where they’ve learned something, and that’s all collapsed into 200 pages.

If  you’re going through a VC founding round, I think it’s good to read that book. And everyone’s dealing with M&A and fundraising. So these topics are deeply explored with expert practitioners that do this every day. I also take a deep dive on the legal terms and what they mean, what to fight for, what not to fight for. If you’re not fluent in these terms, some VCs will not invest in you based on that. I know VCs that will not invest in a founder for whom it’s his first time raising VC funding because they don’t want to take the time to even explain what the legal terms mean. So if you read these books and you understand them, you can speak more fluently the language with investors, and things will go faster and better for you.

So that first book is quite good, the second book is ‘Masters of Corporate Venture Capital’, which is CVC, which is a very different animal. So these large corporations are investing primarily for a strategic return. They want to make sure that they’re not losing money, so they’ll tell you “We’re investing for financial gain, financial returns, but most importantly, strategic returns.” And they all are different, they all are unique, but it’s a very complicated topic.

For example, I introduced NodePrime, one of our startups, to Albert Kim at Ericsson Venture Partners, which is the corporate venture investment group of Ericsson, which makes wireless telecom networks. And they invested into the company, and then they acquired the company. So for me, as a VC, I wanted to sell the company to Ericsson for the highest number possible, for the biggest exit consideration we could get. Whereas this VC wanted to sell the company to his own company at the lowest price possible. So you have these conflicts of interest.

So ‘Masters of Corporate VCs’ I think is a required reading for everybody now because almost 40%, depending on what sector you’re in, of all venture financings have at least one CVC in it, one corporate investor. Like Microsoft or Intel – one of these corporates. So that’s a good one to read. If you’re a VC, I think it’s good reading for all this. It’s almost dangerous not to know this stuff. Like flying an airplane and not know how to operate it.

Another book that’s not by me, I’d recommend it – ‘Venture Deals’ by Brad Feld. Brad is in all my books and he’s a member of Foundry, a great venture firm based in Boulder, Colorado. Ge gets really detailed on venture financings. I’ve read his other books, too, they all are good. ‘Startup Communities: Building an Entrepreneurial Ecosystem in Your City’, if you’re in a place like Europe, he gets into details about building a startup ecosystem. That’s quite useful for places outside of Silicon Valley or New York, or London, where they’re quite involved.

I think it’s good to read, and it’s good to listen to podcasts as well. You can search for venture podcasts. The one that I enjoy a lot is Jason Calacanis’s, it’s great and he’s really fun. He can make a boring topic entertaining.

And do you like where you are now in terms of your current career? Or, maybe, you would like to try something new to apply your knowledge and ideas to?

I think a lot of people are attracted to becoming VCs. It’s notably more male than female. Although, when a female gets the bug, she’s as bad as any guy to get into venture capital. And yet, when you become a VC, in some ways it’s a difficult lifestyle, especially if you’re raising the money and you’re deploying and investing the money, and you’re helping the startups. You can work as much as you want and be working from very early mornings till late nights on time zones.

What’s making it more interesting to me is building an international venture capital firm. I think Tim Draper did something very interesting with the DFJ and the Draper Network. I can only say good things about it, but we’re doing things differently, we’re doing some more financial synergy, so that people are financially motivated to help the other portfolio companies, to help the other general partners.

And so 7BC stands for seven borderless continents and borderless capital. If the founder raises money from us, they will sail the seven seas and see the world. The short version of what we’re doing is we’re looking to launch VC funds in cities all over the world: Southeast Asia, China, UK, France, Poland, Brazil. Long-term, we’re looking to have VC funds all over the world, but structured in a way that each fund is subsidizing the other funds. And so there’s a little bit of a communist spin to it, that it’s one family that’s supporting itself and even supporting the launch of the next one.

So normal VCs keep all the marbles for themselves, they’re kind of greedy little children. They keep it all for themselves. While I think that there’s a global play here that you want to connect a company in say Poland or Ukraine, or London to the ecosystems in New York and Silicon Valley and be able to access that capital, access these lawyers that are more investment bankers than they are lawyers, access all the big balance sheet M&A buyers. And then you want to also connect the dots of these guys back to them. If somebody knows is well connected to Emmanuel Macron, it’s our guy in Paris, he is literally friends with Emmanuel Macron, and so you want to be connected to that guy. Trying to do business in France without the right business network – don’t even bother, don’t even try. Doing business in China if you’re not even a Chinese company is a complete waste of time.

So we’re trying to solve these international problems by creating venture capital infrastructure and entrepreneur infrastructure for people to do business internationally. So that’s more interesting to me than just being one more Sand Hill Road VC in Menlo Park, Silicon Valley.

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About the Author

Vanda Vovk

Journalist, translator.

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