Reflections on 5 years working as a Venture Capitalist

I can't imagine it's been 5 years. 5 years since I decided to take the plunge and lead a venture capital firm.

If someone told me I would be doing this job I would have shrugged and laughed! I would have told them they were crazy.

In the beginning, I had a lot of self-doubt. And honestly, I wasn't the right person for the job, at least not up to the stereotype we were used to seeing in the market (ex-investment banker or financial analyst).

But good partners and a great team by my side helped me in my journey. And 21 great LPs later we are now getting into the 4th year of this venture capital fund, having invested in around 21 companies so far.

Here are a few things I have observed

Venture Capital is a collaborative effort

You can find the best teams working on great ideas targeting the big markets. But if they don't have access to other VCs that invest in their sectors they will struggle.

Although, commonly, good-performing companies will find investors; this falls short in the Middle East.

More VCs need to play ball together. And just like teammates who need to work together go on "team building" exercises or retreats. Fund managers and investment teams need to create those spaces where they get to know each other.

It's all about creating a unique pipeline

What makes one fund different than another is the unique set of startups that they work with. It's not about following the hottest startup created by a serial entrepreneur, but finding those jewels in the rough.

And after finding them, convincing them to take your money. Great teams are usually comfortable enough not to take excess cash until the right time.

Yet, due to a lack of funders in the Middle East, startups are still lacking in funding as there seems to be a limited number of oversubscribed rounds.

You have to come to terms with that sometimes, it's out of your hands

Although we would love it if we could have a huge impact on the trajectory of the startup we usually don't.

As a fund manager, you are lucky if you can have a %10 impact on the outcomes of the startup. You do try your best, but you are not the founder and most of the time don't have the skills to run the company better than they do.

And if you chose badly and ended up in a bad team setup or startup. No amount of work will get you to put them on the right track, you should cut the fat and count your losses.

Be there for them when they need you, but don't cry over spilled milk.

Talent can come from anywhere

Although investing in teams that have been exposed to great work culture has its benefits. Sure, an ex-Google or ex-Meta helps.

But it's not the only place great founders come from. They can come from a fast-tracked experience in a few smaller good companies and with enough passion, hustle, and good judgment, they can outperform founders who make Forbes lists and sit on boards of companies.

I have met & worked with founders who came from different paths of life and not the typical Stanford or Harvard path.

It's a superpower to be bootstrapped

Never be at the mercy of your monthly burn. Always spend less than you earn. I know such common advice to give, But people forget about it, and then they end up making huge mistakes and accepting bad deals because they did not take the more optimal path.

It's always better to hire people when there are roles to fill. Never for the sake of it.

People who have long-term goals reach higher ground

Startups that are focused on short-term goals end up running in circles.

Having a compass and following it seems to work best for startups. It usually doesn't click until some time. But when it does, Oh boy it works superbly.

Mistakes of omission hurt more than mistakes of commission

People who end up passing on a good opportunity will have much greater regrets than people who made bad calls.

When they ask elderly patients at death beds about their biggest regrets they usually mention the things they didn't get to do. Instead of dwelling on mistakes they did.

Those regrets are the ones that will haunt managers for years.

I'm sure VCs that had the money yet were never able to put a small ticket in a Replit, an Instabug, or a Writer have an uneasy feeling when these names come up during a conversation.

In the end, I'm loving it

For me, having been part of the journey of teams that are changing the way things are done in the world has been very satisfying. Although in hindsight I might change a thing or two about the vehicle and the way I do investing.

I'm up for another 5 years of doing this. Hopefully, I will get the chance to do more coding though. I do miss that, to be honest.

Looking forward to reading this in 5 years and seeing how my thinking will have changed.