Mark Suster is a well-known angel investor and the mind behind the famous blog “Both Sides of the Table” covering the venture capital issues and markets. He was also the founder of ventures called “BuildOnline ” and “Koral” both of which were acquired by bigger companies and competitors .
Mark joined Upfront Ventures in 2007 which specializes in investing in early stage tech companies; making 173 investments in 110 companies located in North America and Europe. Being at the helm of the tech venture capital world, his insight into building companies and ability to see the potential in a sea of startups is unparalleled and his views are crucial and important in understanding the world of startups and what goes on behind the curtain.
Recently Mark attended a Product Hunt Live Chat which attracted hundreds of questions from founders and startup enthusiasts across the world. We took time to put together a precise version of his answers. Here Mark invites you to the journey of putting your best everyday to see your passion comes to life.
About Knowing Potentials and Creating Connections
“…sometimes it's luck. I had dinner 5 years ago and sat next to a young entrepreneur named Brian Li. We struck up a conversation. I could have ended that night. But he's been politely persistent with me over the years. We have similar interest in food and so we try to grab meals together from time-to-time…... Another time Raj Suri - who had been commenting on my blog (the best place to start an online relationship with me - asked for 15 minutes of advice. So I knew he had spent time on my blog so I agreed. We had a 45-minute call. I really like him as a person. He was smart and thoughtful. So over the years we've carved out time for each other. There is no "one size fits all" but there are two stories for you. Mostly it's: likability + polite persistence + smart / interesting points-of-view + time”
In a world where startups are popping up like mushrooms everywhere, it is often hard to like ‘finding a needle in haystack’ situation for venture capitalists looking for potentials that are sustainable going forward. AS he stated it is often left to luck; which would be entirely depended over a dinner and representing an interesting point of view which interests the investor. Polite persistence and going about it in a smart manner would also open up viable investments in the crucial early seeding stages of a startup.
About Startups seeking Funding and Managing Expectations
“- keep burn as low as you can but certainly "cut to scale" for your cash balance
- start raising early
- expect it to take longer (at all stages but especially later stages)
- have the confidence to go for investors and price you want but the wisdom to accept a lower price or lessor target investor if the round is too slow. Capital matters more than maximizing price”
About Changing Minds and Adapting Fast
“I was slow to see the value of SnapChat . I was wrong and am fully bought it.”
SnapChat has been invested over US$1.34 Billion by 16 investors in 8 stages; which shows the potential of this messaging app which was garnered global spread in users and investors such as the Chinese giant Alibaba investing US$200 million in the startup shows the global potential for this venture. As Mark mentioned; he was slow to see the potential but he has adapted his views which is very important in the fast moving world of venture capital and tech startups.
About Regrets and Readjusting
“I spent 6.5 years running BuildOnline and 2.5 on Koral. I stayed too long at my first company and not long enough at my second. I sold too late the first time and too early the second. I was going to start my next company when my VC (who backed both companies) asked if I wanted to join as a partner. I thought "why not? if it works I can stay a VC and if not I already know I can start another company." It turned out to be a great decision because I think at my age (47) I'm a better coach than player. I can't quite hit the jump shots or run as fast as I used to but I can use the wisdom I picked up to help others.”
In Mark Suster’s own two ventures; he mentioned regrets in selling one too late and the later too early which has adjusted his expectations and joined Upfront Ventures in 2007. He realized fast that he did better mentoring than being running a startup. He gained the perspective to see the future of a potential startup and letting them grow in their own accord with crucial investments.
About Pounding the Pavement and Finding Success
“If you've pounded the pavement for years with no success you certainly have to ask some tough questions about your: skills, relationships or business. This is a founders' market so there is definitely a strong signal to absorb and consider if it's taking too long. try meeting with some successful entrepreneurs and ask for their unfiltered feedback.”
Startups, being inherently risky ventures, is often hard to break out and find success even after grinding at it for many years. When the tunnel vision of minimal expectations befalls an entrepreneur; Mark Suster suggests a change in views. A veteran outsider fresh perspective is often required and it is crucial for them to be unfiltered with their feedback as it helps to find out the mistakes and adapting to those mistakes would possibly break them out of their grind.
You can find Mark’s insightful blog here and his twitter for possible 140 word conversations.