What I’ve Learned from 20 Years as a Venture Capitalist by Rich Levandov Partner at Avalon Ventures

“I’ve been in a uniquely exciting position throughout my 20+ years as an operator and VC to help develop the future of technology and the teams that make that happen.”

“From my early days at Phoenix Technology and the invention of the PC, to my involvement and investment in wearables and UAVs, I’m just as invigorated about the excitement and challenges of being in this business as I was on day one.”

4 Core Tenants as a VC

Many define Avalon’s intuition in markets and technologies as prescience, but what it actually boils down to are a few core tenants for creating disruptive, category-defining companies and achieving capital efficiency.

1. Drive Ownership

Driving ownership means you don't need a heroic outcome to have made a meaningful investment.

1. Drive Ownership

In contrast, the spray and pray approach used by many micro funds and angel investors is not capital efficient for the investors or beneficial to the startup.

Doing so sends a soft-commitment message and limits the definitions of success.

1. Drive OwnershipIf you’re going to be in the trenches with these people for years down the road, you need to know your investors are committed — especially when hard times come.

2. Success Is Driven By Three Things

They say, "Success is driven by three things: people, product, and money, and any two will get you the rest." And I’ve found this to be true.

2. Success Is Driven By Three Things

My partners and I know great ideas and founders when we see them, but it’s rarely who every other firm has their eyes on.

We’re not interested in party rounds or who the media reports is a "rockstar" founder.

2. Success Is Driven By Three Things

2. Success Is Driven By Three ThingsWe typically invest in companies with technical CEOs, where an engineer or scientist is the founder driving innovation, not media coverage.

We’ve had many successful investments whose companies were not on the front page of VentureBeat or TechCrunch.

Longtime friends and firms Fred Wilson of USV Ventures and Brad Feld of The Foundry Group are a few firms we share these values with and we often find ourselves investing together.

In fact, this is a tradition that goes back to 1996 in the Softbank Fund.

3. Unicorns Happen When They Happen

While some VC firms obsess over discovering the next billion-dollar company, we believe every company we invest in can become a billion-dollar idea.

3. Unicorns Happen When They Happen

This is why we invest in the companies that we do, but we don’t limit success to that definition because you cannot ultimately control the outcome.

3. Unicorns Happen When They Happen

We focus on leading investments in early stage companies to allow them to grow the business without worrying about burn rate.

We’re in it for the long haul so we’re there when they company needs more money to scale.

4. Let The Founder Be The Founder

Too often, VCs get too involved in a company’s process, advising them about things that are too far outside of their expertise or when it’s not needed or wanted.

4. Let The Founder Be The Founder

We’ve seen far too many hours wasted trying to appease that one thing your VC said rather than building the product your customers want.

4. Let the Founder be the FounderThis is all why the Hippocratic Oath applies well to the VC business.

There are definite points where a VC is obligated and required to intervene, but only at strategic points of engagement focused on course-correction, not debating minute details.

Now Is The Best Time to Start SomethingOver the last 20 years I’ve seen a lot of exciting changes happen. With more and more VCs entering the space, now is truly the best time to start something.

Let these four strategic principles guide your investments and incredible things will happen.

Learn more!Visit http://avalon-ventures.com/blog for more actionable advice on early stage startups, VC funding and other entrepreneurial tips.