Investor Wisdom: Advice I Would Give My Past Self When I Started In VC 

I’ve started to notice that I’m consistently one of the oldest people in the room when I meet with other investors and startup founders. While I still seek advice and mentorship from people I admire, I’ve also noticed I’m dolling out more of that than I’m consuming. In many ways, I’m still just getting started, but I’ve also come a long way and earned some wisdom the hard way.

If I could go back in time, here are a few pieces of advice I would give to myself many, many years ago when I started my career in venture capital. ‍

Relationships are everything

It’s easy to get caught up in chasing fast-moving deals in the hottest trend or startup. Many investors do, and there’s no shame in it — except the performance metrics those deals tend to yield.

Venture capital is a long game, with cycles that span many years, even decades. Over even a long career, you may only see two or three of those cycles and the investments you make have maturation dates that usually span a decade.

The people matter more than the deals. This industry runs on trust, not transactions. My LPs trust me to deliver and that trust is transferred to the founders I invest in. The trust I establish with my LPs is the foundation for future investments and the way founders maintain my trust often provides them with funding for multiple ventures.

The best investors invest in founders — not startups — and that dynamic transfers to LPs. People remember how you treat them when there’s nothing to gain and winners often come from unexpected places.

Earn your filter and maintain the hustler mindset

Take as many meetings as possible. Meet as many people as possible. Listen to ideas you think are crazy, pitched by people you think are nuts. Go deep — call customers, talk to parents, professors and anyone else that can provide even the smallest signal on the founder.

It’s OK to ask dumb questions. The best investors don’t win with spray and pray. Selectivity scales and drives long-term success. The faster you can develop a filter, the faster you’ll earn the ability to select winners.

That skill only comes from reps, so don’t waste time curating meetings based on perception, ego or prestige. If you do this well, your job will get glamorized and it will become increasingly difficult to maintain a beginners mindset, which is essential.

Early-stage investors win by caring more about their founders and the details of their business. Never hesitate to roll up your sleeves and dive deep into customers, unit economics, churn curves, competitors, fundraising decks and any other granular component necessary to make your founders succeed.

Build a brand before you need one

By the time you actually need to build a brand around yourself and your fund, you’re going to be leaving opportunities on the table.

Founders and LPs alike need to know who you are and what you stand for, and the earlier you can establish those channels and develop a narrative history the better — even if no one sees it for years.

You don’t have to be right, and you can change course at any time.  Getting something out there is more important than being perfect. Teach the market, share what you’re learning and seeing, and transfer value without expectation of return. You’re playing the long game, remember?

One of those posts from four years ago might just be the reason the deal of a lifetime finds you. A brand is not a logo, it’s a reputation. Establish it early with no expectations and it’ll pay dividends when it’s needed most.

Final thoughts

Venture investing is not easy. There are volatile cycles, big decisions and an enormous amount of dedication required to successfully establish a 20- to 30-year career. The North Star to rely on is relationships built on trust. Relentless effort is a prerequisite, but ultimately the best investors have developed and nurtured relationships. Do that and the returns will come.

As the co-founder and managing partner of MGV, Marc Schröder is committed to establishing MGV as the premier venture firm for world-class tech entrepreneurs to accelerate their visions. Under Schröder’s stewardship, MGV has swiftly ascended to a top-quartile firm, surpassing the performance of 95% of venture funds. The performance of MGV is driven by Schröder’s unique approach to venture investing — that providing intensive sales training, devising robust fundraising strategies and securing follow-on investments is the best way to support founders and drive the deepest return for investors. Business Insider has recognized him as one of the Top 100 global seed investors, and his perspectives are published regularly in Crunchbase News and other leading publications.

Illustration: Dom Guzman