Mark Boslet put up a nice post today on PEHub with commentary from a panel I was on this week at the AlwaysOn Venture Summit in Half Moon Bay. The main thrust of his post reflects comments I made during the panel about two core tenets of GGV’s investing model:
1) The CEO. We strongly believe in backing great CEO’s. By the time a company gets to growth stage financing (usually a second or third round of venture funding), we expect to see not only a good/great CEO, but also a strong management team around him/her. This may not sound too different from the way other venture firms approach their investments, but the primary point here is we are highly unlikely to fund a deal if we don’t see a strong CEO in place. In short, if you’re a CEO raising money from GGV, we no doubt love the company/team/market, but the majority of our bet is on YOU.
2) The Relationship. We tend to have known the companies and the teams we are investing in for an average of 9 months prior to our investment (and as Mark points out, in the case of Internet music leader Pandora, 4 years). Getting to know entrepreneurs and CEO’s early in the company’s lifecycle enables us to watch them in action, become highly knowledgeable about their business and often helpful in building out the team, making customer introductions, etc. long before we invest. Having spent the last 10 years as an entrepreneur/CEO, I’d advise anyone in that position to do the same. Getting to know your investing partners on a personal and professional level long before they wire the money is a (very) good thing. NOTE: This doesn’t mean we move slowly. Although I had known Chris Barbin, CEO at Appirio for about 8 months before we invested, we moved from first presentation to term sheet in just 4 days when the opportunity arose to lead the company’s C round and join Salesforce.com and Sequoia as investors.
Glad to see Mark at PEHub giving a little love to the pro-entrepreneur mindset that I know many of us in the VC world have (despite what you might read elsewhere!).