Three Things I’ve Learned From VC Lab
Three Things I’ve Learned From VC Lab
Here's what I learned from participating in the leading venture capital accelerator
For the past five months, I’ve been going through VC Lab, the leading venture capital accelerator.
It’s an intense, 14-week accelerator program that provides a curriculum, tools, and support to help new VC managers close on capital faster and more efficiently.
And damn, do they accelerate! This is how my cohort members and I feel after the program:
I am blessed to have participated in and have gained so much knowledge from the program.
Here’s what I’ve learned about venture capital going through VC Lab.
Three Things I’ve Learned From VC Lab
1) There’s so much more to VC than just doing deals
I help run the Deep Ventures investment syndicate, where I've led eight investment deals in the last few months. Investing in and supporting founders is fun and rewarding, and I’m lucky to be part of their journey.
Through VC Lab, I’ve learned that being a VC is waaaaaay more than just investing in deals. It entails all the tasks necessary to build a lasting business.
You need to position your firm in the best light possible - tighten up your investment thesis, determine and communicate how you add value, create engaging and informative materials, and more - to attract 1) Limited Partners (LPs) to invest in your fund, and 2) strong startups in which you will invest.
You have to model your portfolio construction (the number of deals you will do, how much money you will invest in each deal, target ownership percentage of each deal, and many other factors) and ensure your financials are sound.
You need to assess and recruit partners - investors, team members, law firms, and others - whom you’ll work with for years or decades.
And much more!
You're building a firm, not just a fund. And there's so much more to that than just investing in startups.
2) Your Network is Your Net Worth
VC is probably the most network-driven job in existence.
Especially for new managers, the strength of your network will determine your success.
This manifests itself in two ways.
First, new managers will be highly dependent on their first-degree connections in raising their first fund.
These connections include friends, family, and close industry contacts, and they will likely be your first LPs. Then these people will hopefully introduce you to their connections because they trust and enjoy working with you, and they believe that others will benefit from doing so.
Next, a lot of deal flow will come from your networks.
It’s important to maintain strong relationships with other venture capitalists and operators so they can refer good deals to you (and you should reciprocate!). Strong deal flow is a huge factor in the success of any VC firm, and many deals will come from your existing network.
VC is 100% based on relationships.
3) VC is All About Trust
Truer words may never have been spoken.
Raising a VC fund is based on trust and the strength of the relationships you have with your LPs:
How much do they trust you to manage their money and act in their best interests?
How confident are they that you understand your industry and will make investments that will provide outsized returns?
Will they enjoy working with you for the next few years or decades?
On a similar note, strong founders will want to work with VCs who have their success in mind:
How much do they trust you to support them through thick and thin?
How confident are they that you can provide value beyond just capital?
Will they enjoy working with you for the next few years or decades?
Trust is truly the most important currency in VC.
Conclusion
The last five months have been a whirlwind in the best way possible. I’ve learned so much about building a VC firm and everything that it entails. And it’s a lot!
If you’re thinking about starting your own VC firm, I highly recommend checking out VC Lab. They are currently accepting applications for Cohort 15, so get to it!
Let me know if you have any questions about the program or VC in general. Happy to help!