Update on the to-do list

The micoeconomics preparatory course used a real life example that all students will be familiar with. © Kellogg.

I'm running out of time. On Sunday I fly out from London to Evanston. The to-do list has shrunk - partly as a result of pruning out some of the more ambitious items (e.g. learning speed reading and touch typing), but I've managed to get quite a bit done, though there are still a few things left to do.

The most tiresome to-do item has been the prepartory online courses that Kellogg was "pleased" to provide incoming students with. It was tiresome because they required quite a bit of time, and I'm sure a good chunk of the material is already covered in the GMAT and CFA Level 1 (both of which I've had some exposure to). Nevertheless, I appreciated the effort that was put into making the course material applicable for real business situations. Scenarios ranged from a startup's accounting practises to Pepsi's pricing strategies. I think I could really get into some of these courses when they kick off properly in the Fall. However, if a paradoy of those courses is what you're looking for, this video is it.

Among other things, the apartment and living situation is sorted out, and my money is the US - in time for the first tuition (and health care) bill to arrive: over £17,000 for the first quarter - getting that was like getting a punch in the face. I'm also mostly packed up: extraordinarily, it seems that I may just be able to fit my who life into two suitcases, a carry-on and laptop bag... I wouldn't have thought it, but it seems possible.

So what's left on my to-do list? I need to revisit my LinkedIn page and CV. The latter of these has to be put into "Kellogg format", which seems to be just Kellogg's way of standardizing CVs into a standard format for easy perusing by employers. Beyond that, the most important things are those related to my entreprenurial ambitions. I've got a rough prototype. I will soon need to start putting together a list of target companies to approach to see if they'll be first customers. This will be a learning experience in itself. Finally, I also want to make some subtle changes to this blog.

The mania continues. Will it ever stop?

The Jack Of All Trades

VCs are jacks of all trades. ©

In the few weeks that I've been interning at a London based venture capital firm, already one thing is clear: a venture capitalist needs to be a jack of all trades, i.e. competent in many skills. Further, to be a really good VC - it is necessary to be master of a lot of these skills. Whereas a career in consulting might be a full time mostly soft-skills based career, or career in banking might be a full-time mostly quantitative-skills based career, a career in venture capital is a mixture of many things.

To illustrate, here are a few of the skills called upon:

• People management: For each portfolio company that a venture capitalist manages, there is a relationship with the entreprenuers of the company that needs to be nurtured and tended to. The entreprenuers might want to build the best product in the world, whereas the venture capitalist will want to just generate 5x returns of his/her investment within 3 years. These expectations need to be managed and a relationship of trust built so that everyone is pulling in the same direction. If things don't work out, the VC will need to be prepared to change the CEO and/or other members of the management team.
• Business acumen: A VC's main management control of a company is via their seat on the company board. To this meeting will be escalated any issues the company might be having. The age old classic with internet startups is the problem of monetization, but it could be issues related to market traction or even the startup's team composition. The VC will need to be quickly add value to these discussions based on the shallow knowledge he/she has of the company and industry.
• Quantitative: Some of the deal terms that are discussed in the process of funding a startup can get very complicated. In fact, some people say these complications have only become possible as Excel, over the last 20 years or so, has become capable of modelling them. To illustrate, there may be several investors investing in a company. One investor may have liquidation preference. This means that in a future sale, that investor can specify to have returned a multiple of the shares of other shareholders. This multiple can be dependent on the sale value, e.g. "2x shares if sale value is $50M+, 1.5x if $75M+ and 1x if $100M". In addition to this, the investor can also stipulate anti-dilution, which means that if the future value of the company is lower than when investment was made, that investor gets their returns at said multiple while all other shareholders are squeezed. This is all for just one round of funding. Over several rounds, with several more variations of stipulations added by several different VCs, it quickly becomes possible for the model to run wild.
  
• Networking, Sales and Negotiation: Building a reputation in the industry and "attracting deal flow" is a virtuous circle. For the industry that a VC is investing in, the VC will need to build contacts - with the big conglemerates as well as budding entrepreneurs. The conglemerates may become future customers of a portfolio company. The entrepreneur could be a future star the VC they'll want to invest in later. The VC will also need to build relationships with Limited Partners ("LPs"): insurance firms, pension funds and others providing the funding for a VC's investments. The sales element of all this comes in when convincing an LP to provide funding or a startup to take your investment. An attractive startup may get the attention of several VCs, in which case it becomes important to negotiate well and project a strong impression in the competitive process between VCs. At other times, it will be necessary for a VC to bring in another VC to spread the risk and the investment. It's a murky soft skills world.
  
• Entrepreneurial Skills: There are not many people within any VC firm, and little or no direction is provided. It will be down to the VC to "make things happen": bring in investment, attract deals and manage companies. In much the same way that entreprenuers do, to make all this happen, a VC will need to attract and gain access to resources that are beyond their immediate control. They might do this through networking, running mini programs with incubators or other means. The VC will have to take the initiative; it is pretty much like running a little firm - except done in a partnership.
  
• And there is more... VCs need to quantify the value of companies not listed on any stock markets, which is a skill in itself, and conduct due-diligence on companies targeted for investment. VCs need to keep abreast of deals that are being made in the market and new technical developments of major companies. They also need to have strategic foresight to guide their thinking of the types of firms they think will be successful.

It is difficult to break into venture capital, because a VC has to be a jack-of-all-trades. There is also no one single profile of a typical VC. This is because a VC will have to be a master of many of these trades; the variation is likely due to what they've mastered.

To-do lists, to-do lists - everywhere.

I don't think I'm going to see a to-do list like this for the next few years :'-(  ©

I seem to be surrounded by to-do lists. Everywhere where I look, there is another list of things that I need to do. I fly out to Evanston on the 16th August, i.e. exactly a month today. I still have a lot to do. The to-do lists remind me of this constantly.

Kellogg's to do list. Kellogg provides a nice list of things to check off. It sits on the welcome site for admitted students. It's very useful. My only fustration with it has been that you can only cross off some things later, because who-ever it is that organises those things has not released the necessary information yet to complete them. Initially we had to wait for the online courses. More recently, it has been the applications to waive courses. However, things have changed recenty: now pretty much everything is available for completing. Now the problem is finding the time to do all that I have left.

My personal to-do list. This to-do list includes things such as cancelling my phone contract and buying suitcases. I also need to figure out which items I'm going to pack for Evanston, which items I'm going to chuck away and which I'll leave with my parents. I also want to get back in touch with a number of people I've not seen in a while, before I leave the UK. It's been 8 years since I've seen some people from my undergrad; better to get in touch now, rather than after 10 years (post-MBA) or later, I reckon.

Am I getting the most I can out of my venture capital internship? I've not started on this to-do list, but I'm keen to get as much out of my internship as possible. I've learned a few things about how companies are selected and gained a great view of the politics of deal making, but there is still plenty more I could get out of this experience. Perhaps meeting potential future partners and investors?

Starting the business. The items on this to-do list include: Building the prototype, finishing the business plan and finding contacts in Evanston to help with sales and building the product. Soon to be added will be that I also need to start thinking about potential target customers and funding sources. If I am going to fund working on the startup over the 2010 internship period, all of this will be important.

Emails to reply to. There are a whole stack of people that I've been in touch with one and off. It plays on my mind that I still need to reply to some of them. The problem with replying immediately is that it encourages them to reply immediatly, meaning I have to take more time to write another email sooner rather than later. Delaying replies to save time is an awkward and embarassing time management strategy... but it kind of works.

Things to do once there. Unpacking, setting up the apartment, setting up bank accounts, utilities etc and even buying a bathrobe are all on this list. I keep thinking that there must be a lot that I've not thought about, because this list is not particularly long. Perhaps this is because I've bought all of the furniture off a leaving international student? Or perhaps I've not quite immersed myself in the reality yet.

There's a lot to be done before school starts. I better get back to getting on with it.

Getting a venture capital internship

Many VCs, at least in London, are unlikely to have a structured program for accepting interns. Consequently, it may all come down to what they currently have going on - i.e. being at the right place at the right time.

To gain some exposure to assessing start-ups from an investment perspective, I sourced an internship at a venture capital firm. I was inspired by readers' comments to my plans for the summer, and Orlando's own pre-MBA internship hunt. Based on my experience, here are my tips.

• Put together a list of VC firms in the geographical area you are targetting. I got this list together mainly through looking at the nominees at European entrepreneurial investment awards, workshops and sites such as Crunchbase or a directory.
• Determine the specific areas where you can contribute something, based on your background and expertise. Is it digital media? Life sciences? Clean tech?
• Look at the websites of the VC firms you are targetting. You will need to filter out some of the companies to find those with a fit for your background. Look at the portfolio companies and the backgrounds of the partners.
• Know something about venture capital. Read the gossip on TechCrunch, the news on VentureWire or WSJ, the thoughts of actual VCs and learn about how vc works.
• Network with people. I initially tried to do this through entreprenuerial events, but I did not meet many VCs there. I did meet other kinds of people: lawyers, brokers for VC, recruitment specialists for VCs. I found some people accidentally, e.g. someone who worked at portfolio companies through a public speaking club I frequent etc. They all had interesting advice and continue to help shape my CV.
• Contact the venture capital firms on your target list. More specifically, do some research on the people on the VC team. Try and show how you can add value; this will likely be in deal sourcing / screening. Step two of this article might shed some light on some dynamics. I contacted the partners directly and attempted to follow up by phone.
• If the partner is interested, they will respond to your email or delegate to an associate. A phone call or meeting might follow. If the partner does not respond to your email, it is unlikely you will be able to get through to any partners of the firm by phone. I was able to get through to secretaries and PAs, who were usually aware of what is going on and can often speak for them or at least advise how things work at the firm.
• Be persistant, keep following up with anyone that shows interest and stay determined.

Canned responses for leaving work

 Ladies and gentlemen, I introduce you to my "roomies" - Snap, Crackle and Pop. ©

Friday was my last day of work. Well... sort of. It's my last day of work in my current job. On Thursday, I start an internship at a venture capital firm. It's going to be a busy summer leading to Kellogg.

I feel like I've been counting down to these final days leading to Kellogg since I was admitted to Kellogg in December. Over the past few months, I slowly told people at work about my plans to leave. The reactions were mixed. I came up with a standard set of canned responses to common comments and questions. Here are some of them:

• What do you want to go back to school for? It's true. You got to admire Rodney for sitting in that same job for the last 20 years, waiting for his pension.
• So you've got a big change ahead of you? You mean American girls who dig British accents?
• Kellogg? Why does that sound familiar? Because they make cornflakes?
• What is the course content? 35% women. Average age: around 27.
• HR: Do you think you'll come back here after you've finished? Yes, yes... please just give me a "career break".
• Everyone else: Do you think you'll come back here after you've finished? Err...
• Have you sorted out a place to live yet? Yup. I'm living with Snap, Crackle and Pop.

And so with questions such as these answered, my last 2.5 years with my current employer have come to a close. I feel a set of weights lifting off my shoulders. At the same time, I now feel another set of weights coming to rest these same shoulders.

In the middle of next week I start a pre-MBA internship with a venture capital firm. It took significant effort to source the internship, but I'm hoping it will be worth it. The experience may give me some insight into how these folks evaluate and work with companies similar to the one I want to start. Beyond the internship, I also have a hell of a lot of pre-MBA prep still to do: the online courses, the 360 assessment, sorting out medicals etc etc. Here comes the summer...