A VC: Buying and Selling at the Same Time

Buying and Selling at the Same Time

When you are selling, its easy to get into that mode and miss some great buying opportunities.

We spent the first half of 2004 selling our ideas on how to make money in the venture business to anyone who would listen to us.

We'd walk into a room and the people on the other side of the table were simply people we had to convince that we could make a lot of money. If we convinced them, they'd invest. If we didn't, we'd move on to the next group.

But somewhere along the way, we started to see the people on the other side of the table as people just like us. Their job was pretty similar to our job - to assess teams of people with ideas on how to make money and pick the best ones and invest with them.

And so in the summer of last year we walked into a meeting at General Motors Asset Management and met with two people, Marcy and Charlie, who did a great job of digging into our story, asking great questions, and listening to what we were saying. We liked them immediately and wanted them as investors in our fund.

It was pretty late in the process and they wanted to put in a lot of money and we had already said yes to a bunch of investors so it wasn't easy to see how they were going to get in. But we figured we'd find a way if they said yes.

Charlie was the junior guy, the analyst, who did most of the diligence on us. He asked questions that nobody else asked. He found stuff out about us that nobody else knew. He understood the investment thesis and then started hitting us with the questions we were asking ourselves. We were impressed.

In the end GM didn't get there. They have an great portfolio of managers and taking a chance on two guys setting up shop for the first time together wasn't something they were dying to do. And we didn't have room for them anyway.

But we were upset that we weren't going to have the opportunity to work with Marcy and Charlie going forward. Brad and I were talking about hiring an analyst and we decided that we'd like to find someone like Charlie.

Then I got an email from Charlie. He was thinking of going to business school. He wanted to know if working for a VC firm for a year or two before B school was an option. I went in for the close and aksed him if he'd consider working for us for a year or two.

The answer was yes, and a couple months later, we had a deal.

Charlie's joining us on Monday and we are excited to have him start working his magic on our deals.

But there's more to this story.

Charlie's got a blog that he's been doing for almost a year.

Like most blogs, its about Charlie first and foremost, but its also about VC, his friends, his life, and his interest in careers and career planning.

We found his blog to be the single best diligence item in our process of hiring him. We called his colleagues and supervisors at GM. We called the people he'd worked with and for over the past five years. We met with him a bunch of times. We had a couple of our investors meet him. We invited him to our holiday party and had our wives meet him there. But we got more insight into him from his blog than anything else.

Blogging is transparency. And its a good thing. Because transparency equals trust and trust turns into opportunity. And opportunity turns into money.

So we are excited to have another blogger at Union Square Ventures. It will sure be interesting.

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Buying and Selling at the Same Time

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