Clarifying Recent Posts And Tweets

Strong tweets, loosely held. I use Twitter as a dump zone to crystalize my thoughts around a topic in a specific moment, and it’s awesome that people read them, interpret them, debate them, and disagree with them. Lately, I’ve felt that either I didn’t use the most precise words and/or some of the interpretations of my words distorted the whole point I was trying to make, so rather than do that via Twitter, I thought I would briefly try to explain my point of view on three topics below:

On the “VC Drought” post:
A few days ago, I wrote a post titled A New Kind Of Draught In Silicon Valley, which ended up being widely circulated and cited. Many who shared it on Twitter concluded that VCs weren’t investing as much; that’s not quite right, they still are, but it’s not like the summer, for sure. Also, announcements that are made now were likely closed before Labor Day, so there is a lag in the press about funding rounds. I also fielded quite a few media inquiries, and most of the reporters tied my comments as a reaction to valuations. That is a bit distorted. My main point in writing this post was to highlight what many LPs have told me, which is: They see a lot more money going out of their accounts versus coming back in. That lack of liquidity concerns them, and many of them have encouraged their VCs and GPs who managed their money to be a bit more cautious about investing more before returns start to come in. Just like startups, funds have runways, too.

Facebook As A Trillion Dollar Company:
Open this thread to see quite an interesting debate re: the future of Facebook. My two cents is that Facebook is, relatively speaking, underrated as a company and can execute at the highest level, so much so that I see the network growing to one day become a trillion dollar market cap company. Many people on Twitter countered that this is how things felt with Microsoft back in the day, or more recently with Google, and that something new we haven’t thought of may come along to disrupt Facebook. While I agree new things will always come along, I’d hold to my argument because (1) Facebook own’s the most premium, dominant suite of mobile software on the planet and (2) for any new mega-trend that’s emerging to challenge for Facebook’s relevance and attention (VR, Asia, AI, deep/empathetic web, social commerce, bringing the next 3b people online, video, etc.), Facebook not only has an answer, they are either right on or leading the cutting edge. They are distributing mobile software at a time when mobile is not only the largest market in the world — it is also growing.

Charisma In Fundraising:
The latest twisted war of words was today, when I tweeted that “Most assume “the next round” is usually a function of metrics, milestones, etc. when in fact it’s mostly driven by excitement, charisma.” I didn’t realize it at the time, but I believe now that the word “charisma” can be interpreted by many to have some negative connotations, in the sense that it implies by being “charismatic” that one is being inauthentic or fake. Let me state the obvious to be clear that I would never call for anyone to be disingenuous or to fake their enthusiasm like this. I hope that is obvious. Now, re-reading the tweet, if we substitute charisma for something longer like “genuinely engendering excitement about your company, product, service, team, and vision,” well, I would hope that would be OK. Ultimately, this distorted my overarching point, which was to point out in my experience (biased sample, yes), people who were pitching investors to partner with them largely overweighted the importance of metrics and drastically underrated the importance of genuinely conveying the excitement, the meaning, the passion, the vision to the point where their audience (investors) would actually get excited — I mean “excited” in the emotional sense in that they would even start to use emotion over logic to pursue an investment and partnership. The truth usually rests in the middle, and by that both are probably critical to an effective pitch. I just wanted to point out how so many people don’t give enough weight to that side, and how in my experiences, those who can get others (including investors) excited about the opportunity seem to be more successful in receiving larger investment offers.