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

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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