Jon: Let's talk about how to find a venture capital mentor on this week's episode of the Venture Capital podcast.
Jon: Now, kind of my background is my probably largest mentor in venture is John Richards. He's probably, I don't know, definitely prolific Utah investor, angel investor in the state. Yeah. I think you've also been a great help. I think he was looking at a pitch deck for us last week.
Jon: So and has been a great asset but for those who don't actually have a mentor, is that something that an entrepreneur should try to get? And if so, like, what's the best way to to build a VC mentor relationship?
Peter: So are you asking it from the perspective of an entrepreneur like, Hey, should I get somebody that can help me mentor or they can help mentor me through the fundraising process? Are you thinking more for somebody that wants to work in VC and wants to make invention, wants to make venture investments?
Jon: Let's talk about us an entrepreneur. Who or wannabe entrepreneur. Yeah, who's looking to build that network or to to build those connections.
Peter: Yeah. So, look, I think the reality is whether you're looking as an entrepreneur to raise money or you're an aspiring venture capitalist that wants to learn entrepreneurship and venture investing really is like an apprenticeship industry in a lot of ways, right? And there's a ton that you can learn from. Other people have been there, done that. So look, when it comes to finding a mentor, I think it can be incredibly valuable to have not just one mentor, but probably several mentors that can help walk you through that process.
Peter: I think those mentors, the people that I would seek out, would be angel investors, particularly angel investors that have done a number of deals but have also sat where you are as an entrepreneur and kind of kind of understand that perspective from both sides of the table. I think they can be incredibly helpful. Also think having mentors that work at institutional funds, somebody like myself as a venture capitalist, that's what I do professionally can help.
Peter: Even even before you're ready to raise that money to give you guidance in terms of what institutional investors will start looking for. And then I think the other mentor that can be really helpful is maybe another entrepreneur That's just a little bit ahead of you, right? So somebody that's raised a Series B or a series C from from very legitimate high profile investors can be really helpful in terms of helping you kind of figure out how do you create FOMO and how do you structure things and how do you ask for valuation in the right way.
Peter: And they in many cases, they can they can open up a lot of doors and facilitate relationships that can result and more funding. So, yeah, I mean, I think I think those three types of mentors when it comes to fundraising can be super valuable. So kind of that angel that's been doing deals, not not like a brand new angel, neither is anything wrong with those individuals.
Peter: But what you really want is somebody that's seen this play out a number of times so that that person, kind of prolific angel kind of in your case, like a John Richards, somebody that works at an institutional fund that can help you figure out how institutional investors think. And then an entrepreneur that's kind of recently gone through the process of raising capital that can kind of maybe give you some feedback in terms of what they're seeing in real time in the market, make introductions, those types of things.
Jon: I think for myself how I've gotten VC mentors and I think this is a quote from John Rampton. It's like you find ways to serve other people and help other people out. Yeah. So throughout my network and through the last but ten, 20 years of my professional career, I've constantly been working with angel groups, with VCs.
Jon: And I would assume for and maybe correct me if I'm wrong, but I would assume that for most of the people in my network for five or ten plus years, I've found ways to help them long before I ever asked for anything.
Peter: Yeah, for sure. Yeah. I think that's one of the things that people don't really realize with networking. It's not going to a cocktail hour and shaking a bunch of hands and trading some business cards. To me, like good networking is, you build relationships with people and you build relationships by giving. So you're constantly on the lookout for how can I help this individual or this company or this person or whatever it is, like achieve whatever goal that they might have or overcome, whatever challenge they have, and as you like, put good out into the universe, that good comes back to you, right?
Peter: It may take years, but some of the most valuable relationships I have are ones where, you know, I feel like I put a lot into them not ever expecting anything in return. And then one day, you know, something amazing fell in my lap because of that, that relationship and but if you are always approaching your networking is like, hey, what can this person do for me?
Peter: You know, ultimately those relationships aren't going to be authentic and they're not going to yield the benefit that you're really looking for, in my opinion.
Jon: I think the way maybe I'll share my personal experience of how I did that. So first, when I was in college, I worked with a group called the Uta Angels. I worked, you know, I think where most people look at an internship for like, like three, six months and then they move on. I was probably with that group for about five plus years.
Jon: Sure. And so during those five years, like, it would probably take three or 3 to 4 full working days of every given month, just donating to that group.
Jon: And through that, through that service, a lot of connections came. At that time. There was never Hey, I want to ask, I just figured in a lot of aspects I was learning more from them and I got more from them in like the, like the five minute conversations than I did in those days. Sure, sure. I think other examples you got into Carter because of me or I made that intro.
Jon: I don't know if you would have done that without, but I'm constantly trying to find deals and then match them with with VCs that I think might be a good fit. Yeah, I think another idea that you could do that you could still from this is I think if you found a VC who wants to be building an online presence and wants to podcast, that might be another good way to serve ABC.
Jon: Sure. And I think if you're doing those things without trying to, to get things in return, a natural mentorship relationship will occur.
Peter: Sure. No, absolutely. I think part of it too, is, you know, this idea of like learning from anybody, right? So you don't come with your like, preconceived notions of, I need to learn this or I need to get this from that person, or this person can only really help me in this way. But just approaching it is like, hey, I'm going to do what I can to be helpful to them and then I'm going to just soak up as much as I can learn about anything, right?
Peter: The good and the bad from those relationships, right? Because like during your time with you do angels, I'm sure not every interaction was a positive one. And yeah, every interaction could have been a learning opportunity.
Jon: I think. I mean, one of the biggest learning opportunities I had is I think one one day and for legal reasons I'm going to mention any names, but there was one of their portfolio companies was getting shut down. And so this person said, John, we need to go layoff 60 people tomorrow. Do you want to come and be part of this experience?
Jon: And from a learning experience, most people never get that. It definitely wasn't a fun experience, sure. But I think it's taught me a lot. And every time I go to make a move in in my entrepreneurship career, I'm constantly remembering, am I writing checks that I can't cash? Am I set my company up for failure like that other one did where they overspent and then they were just they were.
Peter: Yeah. But also, I mean, there's probably learnings and like, you know, how they handled that whole layoff situation, right? How did they do it? Well, where did they make mistakes? Look, companies fail and sometimes that's because the founder didn't execute well. But sometimes it's just because, you know, that's life. Things happen. But the way in which you fail can have, you know, a big outcome.
Peter: And in terms of the future success, you know, I was thinking about the startup in Silicon Valley where they didn't fail. They actually got acquired, but they had gone through a period where they had to lay off a bunch of employees. And that had happened like six months before they got acquired. And so what the founder did is he went out and he rehired all of the people he laid off so that their options could actually be exercised so that they could make money in the acquisition.
Peter: And look, I mean, he ended up probably sacrificing a few million dollars of his own money because of that. But the flip side is like the loyalty that he gained from those employees and just from the broader community when that that story got out, probably, you know, it was massively more valuable than any sort of money that he could have made off that one transaction because he went on and started another company.
Jon: Who is this time the name? Can we share the name?
Peter: We could if I could remember the company.
Jon: Okay. If we remember, we'll just include it like right here. So you're watching on YouTube.
Peter: You can look it up. It's a company that was acquired by Zynga. This is probably back in like 2015, somewhere in around there.
Jon: Okay. I think the last where you can also build a relationship with a venture capitalist is Peter has the University Growth fund and you have a student program. So if you're a student, yeah, that might be an opportunity, right?
Peter: Yeah. Look, I think in entrepreneurship and VC and so far as like there are a lot of people that are, that are willing to spend some time to help out, you know, as long as you come to them with purpose and you're looking for ways to, to learn and also to add value to serve. To serve. Right. Like I think a lot of people, just like in India and in any industry, are happy and willing to to help.
Peter: So, you know, look, I think one of the things that you could do is, you know, when you get an opportunity to meet an angel investor or a venture capitalist, start asking them, like, what kind of things do you invest in? What kind of things are you excited about? And then go and like start looking for deals that might fit that criteria and start sending them their way, right?
Peter: That is an easy way to start adding value to those types of relationships. There might be other things that that that that they're looking for, right? Maybe they're one of their portfolio companies is, you know, looking for a new chief marketing officer or what have you.
Jon: So you're acting like jumping is like a headhunter for these companies. Could be.
Peter: Yeah. I think look, understanding this is the same thing with any sort of networking. It's it's digging deep enough to understand like what are their pain points and then trying to find ways to to help solve those.
Jon: I think it's also like fly fishing. You should never cast your a fly once and expect to land a fish. And just like when you're working with like like say, like let's say you're you want Peter to be your your mentor. You know, the first time you ask him and say, hey, can I help you? The answer maybe, you know, and that's totally fine.
Jon: Sure. And you might do it like, I had an intern who ended up getting a job for Microsoft Ventures, and he reached out several times asking for help. And finally, one day there was an event. It was perfect timing. That's when the door opened. Yeah. And so it's even if the VC says, no, I'm. I'm good. Just knowing that you're helpful is never I think is never negative signal for sure.
Peter: For sure. Yeah. And then yeah, I think that's part of it. And I think reaching out to a lot of people also being thoughtful about like, what are you hoping to get out of the relationship, right, from a mentorship perspective. So like I said, coming with purpose, sometimes people come up to me like, hey, like it's really great to meet you.
Peter: Like, can we connect on LinkedIn? Like, I'd love it if you'd be my mentor, blah, blah, blah. And I'm like, Okay, yeah, sure, whatever that means, right? I don't know. But like, like one of my mentors is, is this VC, Jared Zachary? And now I am. I don't reach out to him all the time, but when I have a very specific question, I'll shoot him an email.
Peter: And you know, I cleared that before with him. I was like, Hey, like, I would love to count you as one of my mentors. Would you be willing, you know, every once in a while to to help me kind of work through different issues that I have? Because you've got a ton of experience working in VC for the last several decades, But I don't bother him with things that aren't super relevant or unimportant.
Peter: And so when I do reach out, he is he's awesome. He offers like very thoughtful advice and, you know, guidance. And so I think there's part of that too, is like it's like respecting their time, making sure that the interaction is super meaningful for both parties and then trying to find ways to add value back to that relationship whenever you can.
Jon: But I would try to give 10 to 100 times more than you ever expect in return.
Jon: Especially in that space, because I think in a very many ways Is the popular girl at the dance? Yeah. And you just you also have to remember that that they're busy. They're busier than most people. A lot of people want to help. Yeah. And a lot of people also have hidden motive. So it's important. Just to have that pure motive and say, Hey, I may never get something for this relationship, but I want to help.
Jon: And in helping you learn and through helping and serving, that's when you know, you never know what doors will be opened up.
Peter: Yeah, now for sure. So yeah, so you definitely want to give more than you receive, or at least expect to give more than you receive. But I think there's also like if you're going to ask, ask for things that they can actually give. So for example, I get hit up often times and people ask me for things that like I really can't give them.
Peter: And then I just I just feel awkward.
Jon: Like, what are they asking for? Specifics.
Peter: So it could be everything from like, Will you fund my startup? Like we're a seed stage startup to like, hey, I'm, you know, I want to meet so-and-so in your network. And I'm like, I don't even know you. Like, you know, I'm not I'm not going to, like, make that introduction just off the cuff without knowing who you are, because you know it's going to cost me some of like my relationship currency to make that introduction.
Peter: Sometimes it's like, hey, will you do this one thing that in their mind doesn't seem like it's going to take a ton of time, but in my mind I'm like, Wow, that's going to take a ton of time and I'd love to help them. And so what I do is I, I mark the email as unread and then it just gets buried.
Peter: So like, there are a lot of things like that where it's like, you know, if you're going to like, ask for something like be thoughtful around. Like, is that something that this person can easily give to you or not and be helpful with?
Jon: Like, let's give an example. Like, let's say if like, I want to break my heart, it's going to be my mentor. Yeah. If you start going to events, he's going to show up. But just find ways to be helpful. Like, don't have that ask. I don't think. I think it's very rare. I don't think I've ever gone to ABC and said, Hey, can you open this door for me?
Jon: Yeah, that ask is generally fairly rare and fairly infrequent.
Peter: Yeah. The other thing though, that I found in networking because like, look, as a VC, I'm also fundraising for my fund, right? And you know, over the last several years of fundraising, what I've realized is what you don't want to do is like walk into the conversation immediately, ask for them to invest in your company. It's a lot more valuable.
Peter: Spend time getting to know them, adding value to the relationship, building like a more like interpersonal relationship so they get to know you and trust you and vice versa. And then over time, what I found is that if you do a good job of that, the things about you that are interesting will naturally bubble to the surface and will create opportunities for you.
Peter: So in my case, like if I'm thinking about fundraising, sometimes I'll nurture a relationship over the course of several years and then it's like, hey, you know, I'm fundraising, and they'll find out about that and they'll actually approach me and say, Hey, I know you're doing some really interesting things with the University Growth Fund or whatever it might be.
Peter: I'd love to to talk about that in more detail and potentially invest. That's a so much easier conversation than, you know, day one, you know, walking them through a pitch deck and saying, are you in or not right now where they don't really know you? And, you know, ultimately, whether they're investing in your startup or they're investing in your fund or whatever it might be, they're really investing in you.
Peter: Yeah, to a large degree, especially in the early days. And so that, you know, don't discount like doing the fun things of building relationship, whether it's getting lunch or doing activities or, you know, you know, getting involved in their areas of interest and how valuable that can be as well to developing a valuable and fruitful relationship on both sides.
Jon: You know, another way you might be able to build a relationship with a venture capitalist is maybe what if what if someone came to you and said, Hey, what if I sponsored a monthly lunch and I brought five or ten local interesting VCs? I do all the coordinating. I cover the cost of the event. Where do you see that person as a suck up or Hey, this is a valid idea?
Peter: No, I think those type of events happen all the time, right? And VCs go to them.
Jon: But if someone said, Hey, I want to sponsor the one for the University Growth fund.
Peter: Yeah, I mean, I would I would want to understand what their motivations are. Okay. Right. Because the last thing I want to do is have them sponsor something and then that puts me at this like disparity with them and feel like I need to to respond. But not being able to respond in the way that maybe they want me to make sense.
Jon: Yeah, I think the important part is never to have intent. Hey, I've done X so you have to give me to X back.
Peter: Yeah. Or to create situations where they feel like all of a sudden they now owe you. Right.
Jon: All right. Well, I think those are all the points I have. Is there anything else you want to add on how to, you know, find a VC as a mentor?
Peter: No, I. I think I guess the only other thing I'd say is, like, be thoughtful about the VCs that you want to be your mentors. Right? In terms of what kind of investing do they do, what kind of personality do they have, and how does that mesh with your personality? Don't just reach out to a ton of VCs like I think the more thoughtful you are about how you approach them and the more authentic you can be around.
Peter: Hey, like I actually do love, like the way you approach investing, for example, is going to yield a lot more than just saying like sending out a blanket approach to tons of VCs.
Jon: All right, well, this is good feedback. Thanks for watching the Venture Capital podcast. If you are on YouTube and you're watching, we'll have all the links for you where you can subscribe and we'll catch you on the next episode. Thanks, guys.
