Interview of Two Venture Capital Pioneers. Lessons from Experience.

26 September, 2013 — Leave a comment

“The last person [needed in a company] is the HR person. They’re the destroyer of companies.” Don Valentine

Interview of Tom Perkins and Don Valentine. Both venture capitalists founded two of the first VC firms in USA in 1972. Perkins founded Kleiner Perkins Caufield & Byers (KPCB), which invested in more than 500 companies in their fledgling stages, including AOL, Amazon, Citrix, Genentech y Google. Valentine Sequoia Capital, which then invested in Apple, Atari, Cisco, Youtube and others startups.

I want to ask forgiveness from my brother and all my HR friends for publishing this. I don’t completely agree with it, but the explanation the interviewee’s gives is very interesting. Valentine and Perkins were interviewed by TechCrunch Disrupt SF the 11th of September 2013. I have extracted the most interesting portions of this interview.

What kind of ideas did they liked most to invest in? What kind of entrepreneurs did they deal with?

Perkins explains that he invested “in the idea because bad people don’t have good ideas. I’d look at the back pages to see if the numbers were big, and then if they were I’d look at the front pages to see what the business was.” Valentine explained that the key to making great investments is “to assume that the past is wrong and to do something that’s not part of the past, to do something entirely differently”. When he participated in recruiting people he asked “what was the most outrageous thing you’ve ever done, knowing in my heart of hearts that I’d pick the one who’d done something most outrageous.” Those who said they had never done anything outrageous they were shown the door quickly. “I didn’t want them drinking my wine and wasting my time”, Valentine adds.

Perkins recommends entrepreneurs that “you don’t try to build a complete team first, because you’re not going to get great people to work for a high risk start-up.” He suggests that, if the entrepreneur is the CEO, he starts by himself with the help of a good venture capitalist and he can complete the team later.

Valentine explained that “the last person (needed in a company) is the HR person” because they set the rules and what the ideal worker profile of the company should be. This profile could left out brilliant and creative people for the reason that they don’t follow the rules and they don’t fit that profile. Valentine gives Hewlett Packard as an example. HP missed out on Steve Wozniak, since he didn’t fit the ideal HP worker profile. Because of that, Wozniak founded Apple with Steve Jobs. Then Valentine invested in Apple. In my opinion, Valentine should be very grateful to HP’s HR Department!

What makes a good Venture Capitalist?

Perkins explains about it: “judgment, which comes from experience of having been through tough things”. He says that other characteristics of a good venture capitalist are courage and ambition. “I think it’s tough for a company if the CEO is not as ambitious as the venture capital backers” he continued.

Valentine adds “the ability and willingness to be different. Great companies are built with different products by different people.”

Experience Pill from two Venture Capitalists:

  • The entrepreneur should think outside the box, breaking with the past. INNOVATE.
  • Entrepreneurs who are extremely innovative are VISIONARIES. They are very few and they are the most desired by investors. Do you know any of them?

Related Articles:

Do you think that venture capitalist is really looking for visionary entrepreneurs?

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