I spent the better part of my day today at one of my portfolio companies. It was time well spent and I am glad that I did it, but it wasn't time that I had planned on spending. Nonetheless, an issue arose that made it necessary for me to make time and so I did. Meanwhile, another one of my portfolio companies has a separate issue brewing and I suspect it will require more of my time in the coming days as well. I don't object to spending extra time working with my portfolio companies -- not only is it my job, I truly enjoy it -- but it raises an interesting issue about time management as a Venture Capitalist.
What do VCs do all day? My general sense of the job is that VCs spend their days doing one of three things: 1) working with existing portfolio companies (attending board meetings, interviewing potential executives, helping with sales, etc.); 2) looking for future portfolio companies (reviewing executive summaries, meeting with new companies, engaging in due diligence, etc.) and 3) networking (attending and speaking at conferences, judging business plan competitions, doing breakfast, etc.). And, in reality, networking is just a subset of numbers 1 and 2 -- we network with lots of academics, service providers, entrepreneurs, executives, etc. in hopes that they will either introduce us to some potentially interesting company or ultimately be helpful to our portfolio companies in some way.
In any given week, the lion's share of my work is divided up between helping my portfolio companies in some predetermined way (board meetings, interviews, etc.) and meeting with new companies to hear their pitches. What I have found to be one of the challenges of the job is that because I have too much potentially interesting stuff to look at, my calendar tends to fill up weeks in advance. Yet, in any given week I may have unpredicted portfolio company issues to attend to or I may happen upon a potentially interesting company that requires a bunch of work to determine just how interesting it is. The challenge is that in all likelihood my next few weeks have been sufficiently scheduled that it will be tough to fit in time for the necessary diligence to learn meaningful things about a potential investment or to help manage some unpredicted company issue that may arise. Needless to say, however, these matters deserve priority and attention, and so it is incumbent upon me to make the necessary time for them regardless.
Given the dynamics of my typical week, scheduling is definitely a balancing act. I could leave open time to address those issues that may arise or to dig into new and exciting opportunities. But the bigger the issues or the more interesting the project, the larger the amount of time I will need to commit to addressing them. In the mean time, there are plenty of new companies I'd like to meet with because any one of them may be the profoundly interesting project to which I want to commit a bunch of time digging in on diligence. But I won't know that until I've met with the companies. And, as a result, my schedule gets filled up with potentially interesting deals that may require more time than I have available because I'm busy looking at more deals that also may require more of my time. All the while I am looking for the really great deals in which I will invest and then need to spend even more time helping to manage those companies that become a part of my portfolio. The cycle is a challenging one.
As a result of these dynamics, that which fills a typical Venture Capitalist's day is in some respects dictated by the number of investments he has already made. The more boards of directors you sit on, the less time you have to look at new opportunities. Which is a good thing, because at some point you frankly don't have enough time to properly help those companies in which you have invested. Given what I know of my own week, I am stunned that there are VCs out there who hold a dozen or more board seats. I frankly don't know how they have time to be helpful to the companies in which they have invested, let alone still look at new opportunities.
I suppose this is all top of mind for me right now as I am digging in on a couple potentially interesting investments, working with my existing portfolio companies and still seeing very interesting plans pass through my inbox. And I suppose that explains why I'm sitting here blogging at 4:00 in the morning. If only there were a few more hours in the day.