On learning, venture capital, and being a board member: a conversation with Medha Agarwal at RedpointFeatured
I spoke with @medhaa, investor at Redpoint Ventures, a venture capital fund investing across seed, early, and growth stages. Redpoint’s portfolio includes Looker, Netflix, Twilio, Snowflake, Sonos, and HashiCorp. Medha shared her advice on learning on the job, managing the long feedback cycles of venture, and being a board member. Deeply research your markets of interest. By mapping out the trends, players, challenges, and opportunities in specific focus areas, you are able to have more engaging conversations with founders in these spaces. In addition to internal research, through meeting with founders, investors, and corporate leaders in a particular space, you are able to better benchmark companies and business metrics across the industry as well. Over time, through continuously learning from research and meetings, you begin to see patterns emerge that will allow you to calibrate your investing acumen and get to the core questions that most effectively evaluate companies. Create intermediate KPIs. As an investor in early stage venture capital, you often don’t know how your investments will ultimately perform for many years (sometimes on the order of 5-10 years), so it is important to have intermediate goals for yourself and your investments. For example, track company KPIs quarterly to better gauge how your investments are trending in the interim. Set more internal short term goals as well, such as improving your understanding of a space, helping founders in your portfolio in a more hands on way, or asking more forward looking questions during diligence meetings. Enjoy the process, not the outcome. Another key way to manage the long feedback cycles of venture capital is to focus on the experience rather than solely the exit. Find meaning and interest in each meeting you take and the work you do daily. Be a good listener. A lot of being a board member is building trust with founders and having empathy. A key first step toward this end is being a great listener to truly understand the team and the business as they both evolve over time. Help founders prioritize. Frequently, founders are operating at the micro level, putting out every fire that comes their way on a daily basis. As a board member, you are able to help zoom out to the highest level of the company’s vision and industry. Help identify what their key prioritizes should be and help them execute on these high impact targets.
Thank you for the insightful article! If investments don't come to fruition for 5-10 years, how is your performance measured annually?
@medhaa can share more but from my experience it has to do with # of deals sourced, how many were invested, mark ups before the 5-10 year mark, company performance before the 5-10 year mark, portfolio support/NPS (if your role entails working with the portfolio at all), etc.