Those of you know me well have probably heard the news over the past few months, but this is more of a formal, general announcement: this Friday will be my last day with Atlas Venture. I’ve been having discussions with a number of people I trust in the Boston area technology startup and venture scene and think that this is the right time to exit the venture industry finally try my hand at something entrepreneurial.
Leaving the comfort of a venture/investing gig is a pretty big deal for me – finance is pretty much all I’ve known, and getting a VC position has been a career goal for a long time. When I was a baby investment banker in San Francisco at the tail-end of the dot.com boom I remember meeting with venture capitalists and thinking, “man, how do I get that job?” I worked my down the capital structure, doing some buyout investing at a small fund in San Diego and then later-stage technology investing at Summit Partners. As the end of my two year position at Atlas approached I did a lot of… soul-searching is not the right word, probably navel-gazing is more appropriate. Anyways, I realized a few things:
- I spent my whole life learning how to be the best at finance, but the world of finance just committed harakiri (or as my friend says, “Harry Caray.”) It might be a good time to learn some new skills! One of my partners always says “is this the planet we want to land our spaceship on.” He’s talking about if we, as investors, want to get involved in a particular industry. Putting that same sort of analysis into venture makes me very afraid for the industry over the next few years. I think I’ll direct my spaceship away from Planet VC for now…
- VC is less fun these days. I went into technology banking @ H&Q because I loved the idea of working with young technology companies. And I still love the rush of hearing about a new technology and working with an entrepreneur building a dream. These days, there is a ton of effort is being spent re-sizing existing portfolio companies and doing downrounds. Sure, some new investments are still getting done (and Atlas is in a very solid state to make new investments, with a new fund and committed partnership). But all the Excel cap-table anti-dilution modeling and nasty negotiations with co-investors over companies that aren’t meeting expectations just isn’t enjoyable, and it isn’t really why I got into venture in the first place. I’d love to spend more time growing companies, but given the pressures that any VC with an existing portfolio must be having right now the best place to help grow a business, for me, is going to be within an actual startup.
- The best venture capitalists that I have interacted with have all helped grow businesses. They have a very different grasp of a company’s strategy. My finance training of “let’s look at the metrics” will hopefully be useful in the real world, but I know I’m lacking some of the experiences that would make me grow up to be a great venture investor. I’m not sure that I will want to be a venture investor in 10 years, but even if I do want to be one I need to broaden my skill-set.
- My opportunity cost is very low. The venture industry is shrinking. Well-known fund after well-known fund is cutting the next fund’s size. There are going to be fewer VC positions out there, and I’m willing to bet that compensation has to come down. While headhunters have started calling again with VC jobs, I’m not yet convinced this just isn’t a head-fake.
- This is the right time for me to take some smart risks. I’ve got a great sugar-momma in my wife, so we can afford for me to try to get something new running. And if I fail, well, let’s hope I follow my own advice and fail fast.
- Most importantly, I’ve always wanted to help grow a business! My wife works at a great startup, Hubspot. In the morning, when our alarm clock goes off, I’m jealous of what she gets to do that day. It’s my turn to do something fun and crazy and emotional!
I know there is a very good chance I’m going to suck in the real world. I don’t have the hard skills or experiences to be certain that I’m going to succeed. I’m sure if you listen carefully next week, you’ll hear the none-too-gentle thump of me hitting reality, hard. Venture is a cushy job, probably in more ways that I currently realized. But it’s time for me to stop being a “thinker” and to become a “doer.”
I’m ready to step up the passion. Most of the really great investors that I’ve worked with have been amazing at dispassionately evaluating investments. Emotions can cloud the rational calculations and thoughts that go into deciding where to place your investors’ money. But, as a great entrepreneur Andy Palmer recently told me, startups run on emotion. You don’t convince great technologists and business people to leave comfortable/well paying jobs at big companies unless they buy into the excitement of changing an industry. It’s time to run through a few walls and try to accomplish something crazy!
This promises to be a very fun summer for me. I’m going to be doing a couple of interesting things while I sort out how I’m actually going to get/create a paying position for myself. I intend to help Prasad over at Pixily with his fundraising and his sales & marketing for a few months. Additionally, Shawn Broderick has invited me to hang out at a desk at Boston TechStars. Hopefully I can help the TechStars companies understand how to approach and interact with funding sources. It should be exciting!
Of course, once I’m out of venture I am no longer bound to keep all of the precious venture secrets. I think I’ll celebrate my status as a recovering venture capitalist with a blog on Monday on the real way VCs value startups…
*per a couple of people who pinged me, my going-forward email address is healy (at) startable dot com.
About Healy Jones
Healy is a former venture capitalist with Atlas Venture in Boston and Summit Partners in Palo Alto. He is now the head of marketing for OfficeDrop. OfficeDrop is a cloud filing system, scanning software provider and document scanning service that helps small businesses manage paper and digital documents. OfficeDrop provides tools that sync businesses’ desktops and scanners with an online search engine and cloud filing cabinet. The affordable service saves businesses time and money by enhancing paper based collaboration and workflows, and by bringing paper to digital platforms.