What would venture capitalists do when they don’t have to source or execute deals?

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JASON LEMKIN

VCs don’t spend most of their time on new deals.

They spend most of their time on existing investments.

Imagine you are a VC on 9 boards of directors:

  • Bored, er, Board meetings alone can take 20% or more of your time.  Each board meeting takes a half day including travel, prep, etc.  9 boards x 8 meetings a year x 0.5 days = 36 business days right there.  There’s a reason A16Z added “board partners”.
  • Monday partner meetings can take 20% of your time right there.  Most of Mondays are dedicated to portfolio review, and pitches from other companies that aren’t even yours.  It takes a lot of discussion and time to run a partnership with > 2 or 3 partners.  A lot of time.
  • Fundraising can take a lot of time, although not all the time.  But if you aren’t a Top Fund, you can spend a huge amount of your time raising the next fund.
  • Dealing with your Dogs can take 10% of your time (and 20%+ of your energy and mental bandwidth) right there.  The ones slowly going down the drain, doing drama-filled acqui-hires, that can’t pull off the next round, with quitting founders and failing CEOs — they take so, so, so much time.  And so many high drama calls and meetings.  And if you have a ton of money into a Dog, it can be a career-ending drama for a GP.
  • Working with CEOs, recruiting for your existing investments, speaking, events, etc. can easily take another 20% of your time.  Just doing VP interviews alone takes a lot of time if you do a lot of them.

Best case, that leaves 30-35% of your time to look at new investments.  Best case.

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Published on December 16, 2015
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