Stay up to date on our entrepreneurs, events, research and more. Check out our January newsletter here.
Reprinted from thisisgoingtobebig.com. See the original article here.
By Charlie O’Donnell
In March of 2008, Perry Chen contacted me to ask for my help with fundraising–not the kind of crowd fundraising that he specializes in–but venture capital. It was before Kickstarter got its “e” and it was spelled “Kickstartr.” I don’t think it had even launched publically at the time.
I wasn’t at a venture capital firm at the time, but since I had worked for USV and had also raised an angel round myself, a lot of people used to ask me about how to raise money.
When Perry first pitched, Kickstartr was about bands raising money to cut their next album. That didn’t sound like a huge business to me, because the dollar amounts raised wouldn’t be very big and I didn’t want to count on a bunch of bands to be successful fundraisers.
It also seemed to lack natural network effects–the idea that I would one day subscribe to Kickstartr e-mails and essentially “shop” the site didn’t seem apparent. So when he asked for an intro to Fred Wilson, I kinda ducked it. I just didn’t think it was the kind of thing Fred would do.
I turned out pretty wrong. What Kickstarter has become is nothing short of amazing. I do actually shop the site now, buying speakers and bike lights. It’s like the most amazing ecommerce store, where if someone can think of something amazing, you can buy it. And that’s on top of the impact that people have made in their communities through their projects.
None of this kind of thing was in Perry’s original pitch to me–so I can’t kick myself too hard over it.
So what’s the lesson learned here?
I didn’t realize exactly what I missed until I saw Simon Sinek’s TED talk, which I’m recently obsessed with. He says that people don’t buy what you do, they buy why you do it, and that the most successful people start with an inspired drive and then work outward to a particular function. Apple for example, does what they do because they want to challenge the status quo–to reinvent our notions of what is possile. They do it through great design, and oh, they just happen to make some phones and tablets and computers.
Perry was that inspired about what he was doing–and the particulars of how he was going to get there and build a big business were kind of murky. Yet, it’s exactly these particulars that VC’s obsess over. Your pitch deck includes the “product roadmap” but there’s no slide for “why the hell do we do this in the first place?”
I didn’t understand how important that pattern was at the time, but now, four years later, I get it. Nowadays, one of the first things I ask someone is why they do what they do. I used to ask it out of curiousity, but now I get how important that is to the success of your business.
Had I actually been at a VC firm–and what I do now–is to take meetings with people like Perry. Even if I’m not sure whether what they have is a business, I want to spend more time with really inspired, driven people who have a bigger goal than just putting some nuts and bits together. Not only that, I try to stay close to them over time. My other failure after our call was not staying in better touch with Kickstartr and being more helpful over time. I essentially passed on making a rec to another VC, and that was the end of it for me, as it is for a lot of other investors. Maybe had I gotten to know them better, I would have seen more of their drive and understood the bigger picture.
You’re always going to miss deals in venture capital–but you want to go back and understand why you missed something and whether you can do anything to make sure you don’t miss the next one.
Charlie O’Donnell is a Partner at Brooklyn Bridge Ventures, working on very early stage investments in the “Greater Brooklyn” area, which also includes Manhattan and the other boroughs of New York City. He previously spent two plus years at First Round Capital, where he sourced the firm’s investments in GroupMe (sold to Skype), Backupify, chloe + isabel, Refinery29, Docracy, Singleplatform, and Salescrunch. He founded New York’s largest independent innovation community group, nextNY, and was voted one of the 100 Most Influential People in New York Technology three consecutive years by Alley Insider.
Charlie was the Co-Founder & CEO of Path 101, an innovative startup in the career guidance and recruiting space, which raised half a million dollars and was a Business Insider Startup 2009 Finalist.
© 2018 Endeavor Global, Inc.
All Rights Reserved
Endeavor Global, Inc.
900 Broadway, Suite 301
New York, NY 10003
1 (212) 352-3200
Website by BRITEWEB