For a few years now, I have been hearing good things about the film, “Something Ventured.” It was originally aired at the South by Southwest film festival. This year my entire company will be hosting an event at South by Southwest. About a month ago, I decided to give my team a break. I told them to drop the work for an hour and meet me in the conference room. I decided it was movie night for us. I wanted us to watch this movie together, mainly because I wanted us to all understand how much the industry has evolved over the decades. I thought it would be cool to compare & contrast today’s VC world to the way it all started.
Something Ventured is a documentary film directed by Dan Geller and Dayra Goldfre. It explores the lives of men who were the pioneers in starting the VC industry back in the early 1960s. These men took tremendous risk to back companies that they truly believed in. Where some people saw risk of failure, they saw value and opportunity. The film features interviews with some legendary investors including; Arthur Rock, Tom Perkins, and Bill Drayper. Just to give you an idea these were the guys that got in early stage with Apple, Cisco, Intel and Genentech.
The film goes on to show how VC really changed the world we live in. Besides writing a check,VC’s offer much more to startup companies. They offer leadership, knowledge, and most importantly access to their network. Without VC funding, companies like, Apple, Cisco, Intel, Genentech would have never become what they are today. Our lives would be completely different without their contributions, from the PC and the internet to life saving drugs.
Back in the 1960s, the entire business model was different, and you can see how it evolved into what we have today. First off, there were not many VC funds that even existed. You had a fraternity of men who would meet for lunch, and discuss ideas together. They would show each other different opportunities and if they loved it they would each invest some money into. For the most part, banks did most of the financing. However, the banks didn’t want to take a substantial risk and just hand money over to any entrepreneur. Today, some funds have access to billions of dollars…If an entrepreneur has a great innovative idea, that has high growth potential, chances are there will be a fund or angel out there to support him and his dream.
Investors in the 1960s had a bias toward older experienced entrepreneurs. Young entrepreneurs would just not be trusted; it was too much of a risk. The film shows how the world of entrepreneurs and Venture Capitalists is about believers. Most VCs in the 1960s didn’t know exactly what they were doing. They would take major risks by investing their money into companies they believed could possibly be life changing. Remember; financial models, valuations methods, new computerized technology, and cell phones giving easy access to your network were not around back then like we have today. Today’s world we have VC funds ranging from 2 people to 1000s of people, it’s a multi-billion dollar industry. You have analysts, associates, partners all ripping apart companies and deciding on investment potential.
One of my favorite quotes in the movie comes from Tom Perkins, founder of Kliener Perkins, one of the biggest private equity firms in the world. He said, “It’s great if you can make money and change the world for the better at the same time. “ That statement couldn’t be any more on point, and it is the exact reason why I started a VC fund. It’s the exact reason why my team comes to work every day. This is the ultimate motivation for us. We feel that we have an opportunity to make the world a better place. In my 20 years in this industry, this is the first time I am actually having fun on a daily basis. One thing that I would love to see is this movie re-made showing today’s venture capital markets. Maybe a sequel about Facebook, Twitter, LinkedIn, etc … and the rest of the social media tech companies of the 2000s.Maybe we could get Ashton Kutcher to star… If you have not already seen the movie, I highly recommend you get a hold of it. It is available on Netflix and YouTube for free. I have pasted a link to the movie below…