Affirmations for a VC in 2010

For me, the end of a year and beginning of a new one is an opportunity to step back and reaffirm core beliefs. The list of affirmations (really reaffirmations, because I have believed what is written below for some time but never committed the thoughts to writing) are what you might consider guiding, daily operating principles. Because these beliefs may help to explain my behaviour, entrepreneurs with whom I interact and my colleagues in the business may benefit from reading this post.

In no particular order:

1. Be Accessible

I believe it is a VCs responsibility to be a resource to the entrepreneurial community. A VC must be accessible by the community in order to deliver on that responsibility. This is not entirely altruistic; by being accessible, we develop a network of relationships and put ourselves into the flow of ideas that is the lifeblood of innovation and value creation. I endeavor to be more accessible to entrepreneurs this year than ever before. I’ll start by reaffirming how you can best reach me; here. If you have other suggestions regarding how I can be more accessible, I’d like to hear from you.

2. Be Present

We live in a world with a massive amount of stimulus and more ways to communicate than ever before. But so long as we are operating in the physical world, with synchronous face to face or telephonic interactions, it is imperative to be in the moment. Anything less is disrespectful to the person(s) you are interacting with. So turn off the cell phone for that board meeting, put your computer on sleep mode when you are on the phone. Sit up, lean forward and engage.  Deeply. Richly; as if the current conversation you are having is the most important one in your world. This shouldn’t be hard, because the current conversation you are having IS the most important one in your world; right now.

3. Be Scarce

Time. It is our most precious and fleeting resource. Once squandered, it cannot be gained back. I’m committed to using my time wisely this year. Doing so takes a  level of selfishness. If I do not make time for you, it is because I have decided it is not worth my time. If it is not worth my time, it is also not worth your time and so by the transitive property, I am saving you time by not spending time with you.

3. Plan and React

I’m a big believer in the idea that you can’t find what you don’t yet know you are looking for. This applies to finding great investments as much as anything else in life. I come into the year with a clear sense for the areas in which I’d like to find the two new investments I’d like to make (blog post brewing). I’m also committed to being flexible enough to understand that I must listen to the market, learn, adapt and react. As a result, what I am looking for may necessarily change as the events of the year unfold. And so in 2010, I’m committed to striking a balance between the discipline of proactive, planned sourcing and reacting to the market as it reveals itself.

4. Be Patient and Empathize

I believe that great businesses are not built overnight. The process takes years of laborious effort, smarts and a dash of luck. I admire entrepreneurs who have the stamina and perseverance to run the gauntlet and exit the process with a success. In 2010, I aspire to matching the stamina of the entrepreneurs I back, to be patient in the face of adversity and to remember that this is a people business. Empathy is the grease that makes the whole process run smoothly.

5. Be Urgent

Yes, building a business takes patience. However, I have no patience for a lack of a sense of urgency. There is never a better time to take the next step toward the success of the business than right now. Like the Seuss book “Oh the places you’ll go”, if you are…

headed, I fear, toward a most useless place. The Waiting Place.. for people just waiting.

we’ll need to talk in 2010.

6. Expect a herculean effort

Success comes first and foremost to those that work hard for it. There is no replacement for effort; it is table stakes and therefore must be expected. This goes for entrepreneurs and VCs. Sometimes success comes to those that don’t work hard, but that is not replicable. In 2010, I don’t expect to be lucky; I do expect to work my tail off. I’m likely to expect the same of you if we have the good fortune to work together.

7. Expect realistic results; and work to create break-out growth

Results are a lagging indicator of success; they trail effort. Goals that are unrealistic are worthless. I aspire to expecting results that are realistic and achievable. I am also not satisfied with the expected and so I aspire to help my companies create break-out growth that blows the expectations away.  I expect the entrepreneurs with whom I work to meet the expectations and to work to wildly exceed them.

8. Engage in the play-by-play

When it comes to working with portfolio companies, I aspire to being shoulder to shoulder with the entrepreneurs I’ve backed. Yes, I want to be a coach, but I also want to be a resource using my time, energy, effort and resources to assist the entrepreneur in achieving his/her goals. If you want to improve the outcome for your team, you can’t sit back and watch the scoreboard. The only way to make an impact is to get on the field. In 2010, I aspire to engage deeply in the issues and opportunities faced by my portfolio companies and to make time to understand  the evolution of the business, play-by-play.

9. Be humble and accountable

For some reason, VCs have been put on a pedestal. This is largely because of the association of VCs with successful companies. Of course, this ignores the unsuccessful companies that VCs back; apparently, those don’t count. I aspire to never forget that it is the entrepreneurs that create the value. I intend to give credit where credit is due, never accept credit for the accomplishments of others and accept responsibility for my failures. I expect the same of the CEOs I back.

10. Never lose sight of the scoreboard

Ultimately, there is only one way to keep score in the VC business; generating returns for our investors. Never lose sight of this fact. As a result, I aspire to treating the capital I am trusted with as sacred.

I aspire to live up to each and every one of these affirmations, but I also understand that my efforts will sometimes fall short. When (not if) I do fall short, please feel free to call me out on it. You will be doing me a favor.

Derek Pilling is a Managing Director at Meritage Funds, a growth equity firm. Derek invests in technology-enabled services businesses in the Internet Infrastructure, Cloud Computing, Digital Media and SaaS sectors.Derek lives in Denver with his wife and his three children. In his spare time, Derek enjoys coaching youth soccer, skiing, hiking, spinning and hopping on his rowing machine in the morning.

Posted in Venture Capital Tagged with: ,
2 comments on “Affirmations for a VC in 2010
  1. karen says:

    Great post, Derek. This is advice that everyone can benefit from. Was nodding my head as I read down your list … but realize how hard some of these are in practice (e.g. I have to be better about the Be Scarce affirmation..)

    Thanks for sharing this…

    Best for the new year!

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Derek Pilling

About Derek

I'm a Managing Director with Meritage Funds, a growth equity investment firm based in Denver, CO. I've been working with growth stage businesses my entire career. When I'm not working, I ski, spin, coach youth sports and spend time with my beautiful wife and three kids.

I blog because the process helps me crystalize how I frame the world. I want to hear what you think. Please comment.

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