Shortcut to becoming a venture capitalist: sell your firm for $1.4B
May 14th, 2008 by Benjamin KuoOn of the more perennial questions I am asked by people is “how do I get into venture capital?”. There are plenty of venture capitalists offering up their words of advice, but here’s mine: sell your company for $1.4 billion dollars.
Jeffrey Stiefler, former Chairman and CEO of Calabasas-based Digital Insight, just joined a Bay Area venture firm, Emergence Capital Partners, and is just one of the many post-big-sale CEOs who have moved to the venture capital industry. Stiefler sold Digital Insight in February of 2007 for $1.4 billion. The firm was already public (having made its backers money in an IPO already), but the pattern is consistent with a long tradition of finding those deal makers who know how to build — and sell — their firms as venture partners.
I get countless numbers of people — from all parts of the high tech industry — who ask me how to get a gig as a venture capitalist. There’s lot of MBAs, quite a few business development folks, a few product managers, and countless VPs who’ve approached me over the years. Unfortunately — unless you’re lucky — it’s actually quite tough to find a position at a venture firm. Most VC firms are fairly static, not likely to hire very often, and there’s not a lot of latent demand for new talent.
However, successfully selling your company seems to be a more sure route to a venture role; some folks who have done this include Leo Spiegel over at Mission Ventures (he was chairman/CEO of Sandpiper Networks); Bill Woodward at Anthem Ventures (founder of Paracomp, which merged with MacroMind and went IPO); and Dave Gross and Rusty Reed of Great Pacific Capital (founded Fastclick, made enough to just start their own VC fund) — just a few of the folks that come to mind.
