Late stage, early stage, thesis driven, opportunity driven, fund I, fund XV, operating experience, non-operating experience, Sand Hill Road, SoMa, even the person you end up sharing an UberPool ride with, San Francisco is filled with venture capital.
Being an outsider as both a Southern Californian (vs. Nor-Cal) and East Coast b-school (vs. Stanford or Haas) with roots in auditing financials (vs. building for “scale” ignoring financials), I spent 5 days visiting 15 venture capital firms in the valley (the silicon valley—that is the silicon that goes on computer chips not in implants).
Where I come from, “the valley” is the adult film capital of the world. Just as disillusioned to stardom and fortune is the valley up north. I couldn’t help but sit in on these meetings without constantly comparing the north to the south. Instead of aspiring “actors” it’s “entrepreneurs.” Instead of a “script” it’s a “business plan.” Instead of young associates grabbing coffee for the team it’s grabbing deal flow. Instead of exploiting “beauty” it’s exploiting “brain.”
Both places are filled with characters, immersed in drama, and with egos just as high. The workday begins leisurely and forget about scheduling an 8 am meeting (even 9 is pushing it…how about 9:30 or 10), but be prepared to work at odd hours, especially during weekends and holidays. The minuscule chance of a bright-eyed dreamer obtaining success is ignored and luck embraced regardless if it’s the beauty or the brain that entered the lottery.
From a financial standpoint, both are wild gambles on the future success of that which they invest in. Okay, maybe not wild gambles…all of them…there are factors that increase likelihood of success, like later stage investing (producing a sequel) and investing in a startup with founders who have former founding experience (an all-star cast and director). But unless it’s investing in Fast and Furious 7, aka another round of Uber, almost all conversations came down to a “gut check” and ability to recognize patterns as the motivating reason. For some, like early stage investors, that really is all they go off of, just like financing a movie has nothing but a script and a dream, some investors have nothing but an MVP and half-baked team.
For those looking to grab a hold of the talent, excessive amounts of money are thrown around to create a form of differentiation, and offices are a work of beauty—jealousy exudes anyone walking in the hallowed halls of CAA or NEA…which brings the three lettered acronyms to a new level (add in IVP, TCV, UTA, WME, etc.).
Legends are hailed as savants who can predict the future, the reality of track records show most are washed up by mid-30. It’s a tough and lonely road to the top.
While being burnt and churned out just as quickly, the younger agents of talent compete on intense levels of effort and acumen to hand the heads a bountiful offering from which to choose from, the chosen options (hopefully) yielding massive profits. In return for carried interest and commission checks north of 7+ figures, you get to keep your job. It’s just that up north, you don’t find out if you made a good bet for up to 7-10 years, at least in Hollywood success or failure is determined fairly quickly.
But let us not ignore the magic and skill required of these heads of industry to mastermind the realization of nebulous potential profits from thin air into substantive returns; the likes of which generate the scriptures that propel the ecosystems forward. Concocting an exit, like securing early international distribution rights have reclassified many bound for failure into mild or moderate successes.
The art of the deal, promises of the future, and an ingrained passion for focusing on and being around “potential” fuels the fire. Once chosen as the next big thing, the art of wooing knows no bounds to valuations or extravagant perks when firms feast their eyes on that business, that actor, that idea, that script.
The effort, the fighting (be it with smiles to your face and harsh deals behind doors), and the risk would not be worth it without the lopsided upside of the few. And here too, there does exist that upside. It is real, and its residue lingers thick amongst the Bay Area fog.
Even more so…both Hollywood and Silicon Valley shape the future and direction of the world to an unconscionable degree. The great movies connect us, move us, inspire us, and craft our views of reality and fill our daydreams. So too do the great technologies, but often in a more literal sense. Each builds the foundation for the other to evolve, and as a result evolves the world. Without the technological innovations of motion picture, sound, and special effects, Hollywood would not be where it is today, nor would Silicon Valley be as advanced without the imagination and inspiration of writers and directors of fantasy and sci-fi.
I came in to the trip thinking for a long time that I would be traveling to a new land, that there would be a significant difference between northern and southern California–Silicon Valley and Hollywood. I head back to New York knowing that they’re more than just oddly bound to the same geographical state; in fact, they’re practically identical states of mind. The only difference is one’s product is a piece of entertainment, and the other a piece of technology. But both turn ideas into reality.
The thrill of risking it all for fame and fortune, that historic drive to “Go West” and build a better future in California is still as tangible and ubiquitous now as it was two-hundred years ago; instead of mining for gold, it’s panning for the next big idea. Knowing all this, being raised in all this, I can’t help but sense I understand why my ancestors did what they did to come west when there was not much more than wilderness and dysentery that lined their path. It is that allure of creating something from nothing, to risk it all to turn a vision into reality that called them here.
I too realize, I am made for this.