This is part 9 of 10 of our 10 Years of Laconia Series.
“Don’t become a VC!”
Just kidding. But seriously, understand that the learning curve in venture capital is steep and often unforgiving. It’s practically nothing like angel investing. While angel investing may give you a taste of deal-making and the thrill of early-stage success, starting a VC fund is an entirely different endeavor. It’s a mix of excitement, strategy, and long-haul commitment that requires navigating uncharted waters.
Starting a venture fund is both similar to and distinct from launching an operating company. On the surface, the similarities are evident. You need to establish foundational elements: a clear value proposition, a go-to-market strategy, customer insights (in this case, your LPs), access to capital, a capable team, and a strong support system of accountants, lawyers, software tools, and operational infrastructure. But here’s where the differences emerge: in venture capital, all these systems and processes serve a performance outcome that may take years—even a decade—to reveal itself.
In this business, the timeline is both your ally and your nemesis. While founders and operators may measure success through quarterly revenue milestones or yearly growth metrics, venture capitalists operate in a realm where patience and perspective are everything. A portfolio company that seems to skyrocket early on can just as quickly plummet, while a laggard may discover product-market fit years later and become the crown jewel of the portfolio. Seed-stage VCs, on average, hold investments for nearly eight years before a liquidity event—a reminder that in venture capital, you “get rich slowly.”
The Reality of the Job
Between the high-stakes bets and the long timelines lies the gritty reality of venture capital. Glamorous as it might seem from the outside, the day-to-day involves a series of challenges and responsibilities:
Board Meetings: These are not mere formalities but critical touchpoints for guiding portfolio companies. They require preparation, insight, and the ability to balance oversight with support.
Founder Conflicts: You’ll often find yourself playing the role of mediator, therapist, or sounding board for founders navigating high-pressure situations.
Capital Raising: This is a near-constant activity. Building and maintaining relationships with LPs, pitching new funds, and justifying your strategy can feel like an endless loop.
LP Relations: Effective communication with your limited partners is crucial. This includes regular updates, quarterly reports, and the occasional crisis management call.
Compliance and Administration: Quarterly reporting, audits, and issuing K-1s are essential yet often underappreciated aspects of the business.
Portfolio Company Support: Fires will happen, whether it’s a missed product launch, a talent exodus, or a funding shortfall. Your ability to help steer companies through these crises can make or break outcomes.
So much for the Hollywood portrayal of VC life! The reality is a mix of strategic thinking, operational execution, and plenty of hard work.
The Path to Competency
Over the past decade, we’ve learned that you can get good at this game. While there is no single textbook or foolproof formula, venture capital is more art than science—or, more accurately, a craft that combines elements of both. The path to competency involves:
Discipline: The ability to make sound investment decisions, stick to your thesis, and avoid chasing shiny objects is critical.
Resilience: Investments will fail. There’s no avoiding it. The key is learning from those failures and applying those lessons to future decisions.
Humility: Beware of the smartest person in the room. Overconfidence is often the precursor to poor decisions. Instead, seek out diverse perspectives and remain open to new ideas.
Curiosity: Lifelong learning is a non-negotiable. The market evolves, industries transform, and new technologies emerge. Staying curious keeps you relevant and effective.
We use the term “competency” rather than “expertise” deliberately. In venture capital, there are no permanent experts. The landscape is constantly shifting, and success requires a commitment to perpetual learning and adaptation. Without a passion for growth and curiosity, you’ll quickly find yourself outpaced.
Final Thoughts
If we could go back and talk to our Fund I selves, we’d offer this advice: Embrace the grind, be patient, and approach the journey with humility and curiosity. The glamour of VC might be a myth, but the rewards—financial, intellectual, and emotional—come from the craft itself and the impact you make over time. This isn’t a sprint; it’s a marathon. And if you’re willing to put in the work, the learning never stops, and neither does the opportunity to grow.