I No Longer Want to Be a Venture Capitalist

I want to be something better.

As I work more and more with investors, I’ve come to realize that I can’t be the venture capitalist I want to be.

A venture capitalist (VC) raises money to create a fund, and then invests that fund into various startups. The startup agrees to pay the VC a multiple of that initial investment amount after a certain number of years (or some other agreed upon milestone).

I can’t help startup founders the way that other people can. I don’t have nearly as much operator knowledge. I don’t know anything about business development or product design.

But I also don’t want to just be a source of capital. Maybe it’s cliché to want to add value, but I feel like that’s the fun part about writing checks: it’s a commitment to the journey. Writing a check is like saying “I’m here to help you achieve your goals.”

I love that. I love that venture capital is a non-traditional source of money. That’s why it comes with the knowledge, the expertise, the network…the things that may have prevented the founder from taking out a loan, raising money from family and friends, or applying for grants.

I’ve worked with founders a bit before, and I’m still very passionate about supporting people who build amazing solutions to improve life and generate wealth.

But I just don’t have that knowledge and expertise to justify allocation on their cap table.

I can, however, add value to an investor’s cap table.

Investing in Investors

Over the past three years, I’ve worked with a variety of investors: angels, emerging fund managers, establish equity funds, hedge fund managers. But there’s one model that speaks to me the most: fund of funds.

A fund of funds (FoF) invests in VCs as a limited partner (LP). A LP invests in a fund, but does not manage the money or make investment decisions.

As a content writer for emerging fund managers, I work with incredibly passionate and knowledgeable investors.

I spend my days listening to investors talk about how stoked they are about a particular founder. I see investors do everything they can to get their portfolio companies into the press, but don’t insist on including their own names in the press release.

They spend hours sifting through their contacts to see who can connect a founder to engineering talent, or who might want to invest in their next funding round. They answer phone calls from founders who trust them more than anyone else in their business.

Sometimes these investors are the first check in a startup. The first validation that someone’s idea is worth building.

You might think it’s all about the money. But if you do, then you haven’t met the investors I know.

From Arlan Hamilton’s Investing as a Catalyst alums to Sutton Capital’s Slack channel, Angel Gambino’s Angel Club to Oper8r’s course, there are thousands of investors who are truly passionate about innovation and helping others succeed.

I admire investors’ resilience to raise money, connect with startups, invest in them, cultivate relationships with their own LPs, and support founders in any way they can. The value they bring to the startup ecosystem is immeasurable.

But I also recognize their weaknesses. Like many of us, they struggle to share their own wins. They struggle to articulate why LPs should invest in them. They struggle to make more happen with less, when they deserve to have more.

My Value Add to Investors

For a long time, I’ve been telling myself that I don’t want to be a copywriter forever. And that’s still very true. I do want to be a full-time investor by 2030.

But I can’t let all this knowledge and experience go to waste. Not that it would be wasted on early stage founders, but I now believe my expertise will be better suited for emerging fund managers.

I also believe that, while I find myself having a reasonably high tolerance for risk, I like the idea of distributing my capital across multiple funds so that I can help more investors support more startups.

Fund of funds like Multiple Capital and Sapphire Ventures have indirectly supported numerous companies by investing in VCs who know how to help them succeed. Gale Wilkinson of Vitalize recently tweeted about the potential growth opportunity for a FoF investing in micro VCs.

So maybe in 2030 I’m not just a full-time investor. Maybe I’m a full-time investor whose value-add is promoting my emerging fund managers like rockstars. Maybe I continue doing the same type of work – learning as much as I can about the industry and the obstacles that fund managers face – while helping them continue to grow.

My New Medium-Term Goal

I’ve learned a lot about investing over the past few years. I’ve realized what startups actually need, and what my own strengths are. And as a result of what I learned, my goals have changed.

So you heard it here first, folks: by 2027, my company Added Value Agency will become an advisor to first-time fund managers. And by 2030, I will be a full-time investor as a fund of funds manager.

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