Mar 31 2005

A day in the life of a VC

One of the most common questions I get asked from people outside the VC industry is “what’s a typical day like?” It’s a good question, but a hard one to answer – my days are extremely varied (this is one of the things I really like about my job, in fact). The type of work I do on any given day is very dependant on what’s going on with the companies that I work with (financing, m&a, planning, putting in place a bank line, rolling out new products, etc.), and every day (or hour) seems to bring something different. I’ve tried a few approaches to answering this question – typically some variant of “on average I spend x% of my time on sourcing new deals; y% on financings; z% working with portfolio companies on operations; etc.). The problem with this is that, while it may provide some insight into how I spend my time in a typical month (or quarter), it doesn’t really answer the question, nor give much of a real flavor of what Ido day to day. Since one of my goals with this blog is to write about the experience of being a VC I thought I’d try to do a better job of answering this question by writing about a couple of different days that I think typify the VC experience. The idea here is not to generalize, but rather to report on a couple of days that feel are ‘typical’. I had one recently (that inspired me to try to tackle this question) – it went something like this: Early Morning: Spent the morning working up a term sheet for an investment that had recently been approved by the firm. It actually wasn’t my deal, but the principal who had sponsored it was on a business trip and I was helping out by pulling the term sheet together. To do this I had to work up a version of the company’s cap table that I could play around with (I had one from the company, but the structure of it didn’t allow me to manipulate it in the way that I wanted to). I also spent quite a bit of time with the financing docs from their last round – Series A term sheets are much easier to write than term sheets for follow-on financings where I need to account for the existing cap structure as well as understand what terms I want to keep the same vs. change from previous rounds. The whole process took several hours, after which I sent it off to the partner involved in the deal and our general counsel to take a quick look before sending it to the company.

Late Morning: We were closing on an investment today as well. I had already reviewed the deal docs, but took a last look through the schedules this morning and double checked the numbers again. After a couple of points of clarification with the lawyers, all looked good, so we sent a note to our operations group to initiate the wire transfers.

I also spent about 45 minutes on the phone with the VP of BD of a public technology business that is in a space in which we’ve made several investments. I was interested in his impressions of trends in the industry and specifically his company’s key initiatives for 2005. The company is also a potential partner/acquirer of a few of our investments and I wanted to be sure he was aware of some of the companies in the portfolio.

Lunch: I had lunch with two entrepreneurs who were the founders of a business we invested in several years ago. Their company was sold relatively quickly and all involved (investors and founders) were pretty pleased with the outcome. After working for the acquirer for a while they were ready to get back to something more entrepreneurial and had been floating around some ideas together. They’d settled on something they wanted to pursue and wanted to bring me up to speed on their thoughts/get some feedback. We’re supporting them in their early efforts both by being a sounding board for ideas as well as by giving them some space in our office to use while they get started.

Afternoon: My afternoon was pretty open of meetings, so I returned a couple of phone calls (the most interesting of which was talking to one of the CEO’s I work with about his funding strategy – we’re looking to put a debt line in place at his business and needed to pull together some information before deciding exactly how much we wanted and how we were going to approach lenders). I also talked with an old friend of mine who works for a VC in Boston. We catch up periodically to get a pulse on what each of us is looking at, as well as to keep up personally (he and I worked together at Morgan Stanley back in the mid-90’s). I also had some time to sort through the day’s e-mail – something I hadn’t been able to do in the morning (I get about 200 e-mails a day, so keeping on top of incoming messages is important for staying current).

So there you have it. Not particularly glamorous, but pretty typical of what I spend my time doing. Term sheets, cap tables, financing docs, lots of time on the phone – all in all a relatively usual work day.

For another perspective on a typical VC day, see David Hornik’s post on the subject here.  His extremely funny follow up post to that is here (a copy of parody of VC life that became very well traveled in the VC and legal circles).