Why VC is about sales, and 4 other lessons I learned

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After successfully exiting my first (and only) tech business and graduating from a business school, I decided to continue my career in the tech and innovation space. It is fair to say that to start a career in the venture capital industry (with only one successful fund raised to my name) required a leap of faith and taking risks.

Over the last two years, I’ve learned quite a few things about early-stage venture capital investing and working with entrepreneurs in Southeast Asia. Here are some so far:

1. Make time to learn  and build your own investment theses.

Part of a VC’s job is as simple as having the conviction in something that everyone else is yet to (or doesn’t) visualize. To have conviction, one has to be experienced and an avid learner.

However, I always wondered whether I should be more of a thesis-driven investor or an opportunistic one. What I mean is: Should I create a thesis about how the world will evolve and then invest in companies that are building toward that change? Or should I be more opportunistic with the trends and just focus on backing great entrepreneurs?

It took me a long time to realize that the difference between those two lies entirely in how I want to build my skill sets, personality, and experience. So, I started spending time to learn and form my own opinion. I made it a point to stay clear of all meetings for at least one afternoon every week to research on and understand valuable ideas, trends, and spaces.

Last year, I was able to develop my point of view on various industries in Southeast Asia and the trends that could impact the way we work, live, and play. I believe that this knowledge and conviction will play a direct role in how I support the entrepreneurs I meet, give advice to, and invest in.

2. Look for thesis-driven entrepreneurs.

Investment theses matter because they determine the markets I choose to invest in and the people I work with. After that, an early-stage VC is all about entrepreneurs and great teams.

I have personally met a lot of entrepreneurs from ASEAN countries, Hong Kong, Japan, and South Korea. There have been lots of hours spent discussing and understanding businesses, products, and the entrepreneurs’ vision.

When I was getting started with the VC industry, I asked questions that would help me evaluate product visions and tried to make decisions solely based on specific products and roadmaps that the founders sketched out. However, I realized that these product visions and paths will continuously change as the entrepreneur builds experience in the space.

Twitter spun out of Odeo, Instagram was a Burbn pivot, Buzzfeed evolved from one of the many “fun” experiments, and the list goes on and on. Even Facebook was originally Facemash.

As a VC, a good understanding of the entrepreneur’s thesis might lead to new avenues and new patterns.

I remember having a conversation with a friend about his thoughts on blockchain and other distributed ledger technologies. That is when I realized that it is important to spend more time learning about how an entrepreneur thinks the world will evolve and what customers in that industry might need. Ultimately, it is the entrepreneur’s ability to create and execute a thesis in a market that determines success.

3. Treat founders with tremendous respect.

4. Venture capital is a service business, basically sales.

5. It takes a long time to realize returns.