VC Investor DualityTags: governance, investor style, investors, management
I was reminded of the duality of a investor role while watching a documentary on the Ballet Russes and Sergei Diaghilev. Diaghilev as director of an artistic endeavor had to be a disciplined executive leader adept at running a business, raising funds, managing a team of operators and supervising and bringing the best out of very talented individual key employees – the dancers, musicians, singers. He also had to understand art, get it, relate to artists and their creative expression over and above the mundane, and be in sync with what would resonate with the public, what audiences wanted, sometimes what they were not ready for to shock them.
Many other examples come to mind. Maurice Bejart with modern dance. Bob Fosse or Andrew Lloyd Weber with musical productions. I will even venture to say – no pun intended – that some movie directors fall in the same category as Diaghilev, Bejart, Fosse, Weber. Think of Orson Welles who was a theater director and producer as well as a film director and producer, think of Martin Scorsese with his independence and artistic freedom running his very own business.
VC investors need that duality to be successful at what they do. They need a creative mind to understand trends both macro and micro, to understand how a company and its founders or managers may evolve over time, to help their portfolio companies with outside of the box and original thinking. They also need to be grounded businessmen that run their investment firms as tightly as a boring spreadsheet and supervise their investments accordingly.
The duality needs to be balanced. Too much artistic creativity does not end well. Too much grounded business sense produces average returns. Arguably it is difficult to develop a balanced dual mind and VC or PE firms take a portfolio approach to their investment teams. One partner is more creative, the other more pragmatic. That works too. Further, depending on the stage of the portfolio company and its needs, an investor will deploy his/her duality differently over time.
What brain do you have as an investor, a dual one, a more creative or pragmatic one? As a founder or executive working with investors, who do you resonate more with?