Betsy Flanagan: I know there are actually a lot of people who want to get into VC. I know that you’re an attorney and you made the switch. What recommendations do you have to people who want to become a VC?
David Hornik: Well, I mean...
Betsy Flanagan: Do you have to be a hypomaniac?
David Hornik: Yeah, right. Exactly, hypomanic. That’s really good for you. I don’t sleep. No, this is isn’t medically induced. I mean, the venture business is an incredibly fine and interesting business. It’s not for everyone. I mean, it’s about helping companies and building companies but not controlling companies. It’s about having lots of risks over a very long-term periods of time and being able to still go to bed.
But if you’re interested in being a venture capitalist, I think the best way to get involved is to work with venture capitalists. And that could be in any capacity. I mean, the way I ended up meeting my partners at August is that I was representing a couple of their companies and I got to know them because I was at board meetings and I was saying lots of things at board meetings that may or may not have been the appropriate role of the attorney but it struck me as a reasonable thing to say and they got to know me and we’d have lunch together and talk about their businesses and eventually they said, “Gee, would you be willing to join us and be part of August?” And I said, “OK! You bet. That sounds great!” You know.
My partner Vivek was the technical founder of a company called Cobalt, which we loved. It was this great company and my partners invested in Cobalt. It was this, you know, cute server company and Vivek would come in and explain the technology in an incredibly compelling way and we just really like him. And he built a great business. They sold that company to Sun for $2 billion. It was a great outcome for the founders, it was a great outcome for August and he was at Sun for a period of time as a member of the senior executive-management team. He was running the company within Sun and eventually he decided he wanted to do something else and we said, “Come here, come here!” You know, we think about things in a smart way, we understand entrepreneurs, you know. So it was through getting to know him over a period of time and in the context of company building, selling a company and working as an executive.
So if you can have meaningful relationships with venture investors in companies that are--they don’t even have to do well, to tell you the truth. There is something unique about Silicon Valley that I think really helps around here, it’s that you can fail and still be considered a fantastic entrepreneur. You can have a company that just fails all over the place but if you did all the right things and were smart and have a relationship, then you could come out of it with so much as a “Gee, you know, that didn’t work out but why don’t you join firm?” You know. So my partner Mark was at one of these portfolio companies as a CFO many years ago and when the company--I don’t know the specifics of how the company finished--was purchased or wound down, the partners of the firm then said, “Hey, you know, Mark, why don’t you come work with us because we appreciate everything that you’ve done in that company?” Right, so it wasn’t all out of, “Oh, this has been a monstrous success but this has been not a success. On the other hand you have done a great job and we appreciate the skills that you have brought to bear.”
So I’d say it’s all about people. This business is all about people. So the more people you know in a meaningful way where you’re a helpful part of the company-building ecosystem, the more likely you’ll get the opportunity to talk about the venture business.