A bit of personal news. As of November 1, I have joined Crosslink Capital in San Francisco as a General Partner. At one level the move is a small transition. I move from two additional VC partners to five. My practice has been centered on early stage, Internet services and software. That’s exactly what Crosslink wants more of.` So nothing major changes, except my commute. So why the change? In a word – Relationships.
Crosslink has consistently been a top-quartile firm with its later stage investments and crossover investments. Their ability to cross the investment spectrum is a huge advantage for limited partners. If you have read my series on Venture Capital 2.0, you know why I believe this is true. That same cross-spectrum footprint is also a huge advantage for an early stage investor like me. Let me explain why.
Early stage companies go through predictable phases. First, it is about the Product. Then it is about the early Customers. Then it is about the Partners. Then it is about the Investment Community. All along the team is changing, expanding, and improving.
The successful early stage companies have two fates – they either get acquired at nice prices or they go public. Either way, these companies benefit enormously from having ‘friends’ that run in those circles.
All VCs claim they have relationships as a core asset. But our primary job as VCs is to have relationships that generate deals and then to help the companies in which we have invested. Frankly, it is difficult to have a broad set of relationships with later stage private and public company executives and help my early stage companies and source new deals. I think this is true for most VCs. Broad and deep don’t mix. There are only so many hours in the day, no matter how good you are. Relationships take time.
Crosslink invests all along the continuum, from early stage to buyouts, public investments, and even has a hedge fund. Consequently there are professionals whose primary job day-in and day-out is to have CxO conversations with technology and media companies at all stages. The Firm is organized (and financially structured) to maximize the collaboration across the spectrum to the benefit of the portfolio companies.
So now I will have a fifteen very analytical professionals with up-to-the-minute rolodexes and context to help me and my companies. It’s that simple. This is a relationship business. I am joining one of the best, most organized, and current social networks in private equity investing.
Of course, this is the positive valence. Every transition has a positive valence and a negative valence. The negative valence is more complicated, less important, and consists of a set of personal and professional issues that do not need to be aired in a public forum. I can tell you this. It wasn’t about “VC is broken” – it’s not; “Leapfrog is broken” – it’s not; “Rip got a more lucrative offer” – it’s not. It was just a professional change I wanted to make.
The most important measure of the transition is the impact on my Leapfrog investments. There will be none. I will remain a Venture Partner at Leapfrog Ventures and continue to work with Radar, Riya, Teqlo, and Vast. I will continue to represent Leapfrog and its investors to ensure these companies grow and thrive. I have a responsibility to Nova, Munjal, Jeff, and Naval, as well as to Leapfrog's investors. Like I said, this is a relationship business.
This kind of transition is a common practice in the VC business. It is only that my new investments will be made on the new set of books.
All in all, perhaps the most observable change is that, after nearly 30 years in the South Bay, I will finally ride BART for the first time. Right after my next breakfast at Bucks'.
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