YouSaid · the spoken record

Will Porteous

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21
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2017-07-31
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2017-07-31
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1
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  1. “So, our most recent public investment, and the one that I led, is in a company called Outline, which is a media company founded by Josh Topolski, who was editor-in-chief of the gadget. Josh was at the Verge. He was at Box. He's been kind of a serial entrepreneur in media. And Josh really, his vision for the company embodies three or four things that we believe today about building great media companies. And those three things”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “There was so many. I'll tell you what it was. It was the value that Bill was often good at communicating that smart people, people of all walks of life and backgrounds, less smart people, less ambitious people. Everyone needs to be led. And he used to tell this story about the early days at Google when there was really a culture of just hiring a lot of really bright people and letting them work on things that interested them. And person by person, Bill would go through the company and ask people what they were working on and ask them what they wanted to be working on or whether they wanted direction. And people basically came back and said, yeah, I'd like to have a boss. I'd like to know what I can do to really kind of drive this organization forward. It was that realization that in every company, leadership is the key ingredient.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “About communicating. And I think mentors sometimes are those people who gave us some harsh and direct feedback that we needed to learn from. And there were a few moments in my career where Bill was there for me in that way.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “So I was incredibly fortunate to have a close working relationship with Bill Campbell, the former chairman of Columbia University, chairman and CEO of Intuit, and someone who was Steve Jobs coach, Jeff Bezos coach, Sergei Brennan and Larry Page's coach. Bill cared passionately about building high performance teams. And for the last 15 years, I have taught the second year course on venture capital at Columbia. I brought Bill in always secretly. He never wanted anyone to know that he was there and all these discussions were off the record, just Bill and me and the students talking about building high performance teams and some of the companies that I named earlier. And through that dialogue, which we would hold once a year over about 10 years, I learned so much from Bill about being an authentic leader, about being candid with people while showing them that you believe in them. I learned a lot about”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “I read Fred Wilson religiously. I read Ben Thompson Stratachery pretty religiously, and I read Buzzfeed News because I can't help it.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “So most venture investors struggle with the idea that when you're producing content, it's produced by people. And those people walk out the door every day. And they grow uneasy when they think about the fact that those people could leave and that you might not somehow own the code the way you do in a much more pure innovation company. The reality is that the great media companies have over and over again succeeded by creating an environment where creative people can thrive. And I've watched this happen at BuzzFeed. I've watched it happen at Business Insider. I've watched it happen at the outline right now. All companies in our media portfolio. And I believe that you have to understand, and as an investor, be committed to creating a great work environment. And if you do that, you can attract exceptional creative people who will in turn help drive massive value creation for you. That to me is a key piece of logic in investment.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “So, I have a lot of favorite books. My current favorite book, though, is radical candor by Kim Malone Scott. So we were fortunate to back Kim as a CEO about 15 years ago before she went to Google. And I just incredibly enthusiastic about this notion of having better conversations, whether you're an investor or a manager. Your ability to communicate, to have the crucial conversation, to frankly help someone understand how they're performing well or performing poorly. It's something that very few people do well, and Kim's written just a great book to help us all be better managers and communicators.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “So this is a theme that we've actually been working in various capacities for more than 10 years. Starting 2006 with RE4, we began to look really closely at the way the GPS and location technology market was going to begin to change. Over the subsequent years, we watched as market leading chip companies lost 90% of their value and were replaced by software alternatives, including by one of our companies, Skyhook Wireless, which was on the iPhone many generations of the iPhone served on hundreds of millions of devices, processed billions of location lookups a day. And that was the first generation of this capability. And that's what's given us the Yelps and the Four Squares and the ease of navigation that we all take for granted today on our phones. But if you look towards the future of these mobile platforms,”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Of the fund. I know that my LPs want to say two things in the first few years of the fund. They want to see early liquidity. They want to see us get well up into the double digits in terms of net IRR. And there is that pressure to, frankly, produce performance early in the life of the fund so that everyone can look at it and say, well, gee, it looks good. It's early days, but it looks good. It's early days, but it's even kicked out a bit of liquidity already. You can't manage a venture portfolio quite that precisely in my experience. The company building process is long and it's full of challenging moments. The best companies, the companies that grow better than 100% every year, that can generate gross margins at a very high level and that can be very profitable. They still take a very long time. Frankly, as venture investors, we need more leeway just to be more patient in”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Well, so I think that diversification by time is one of the most important instruments that we have as investors. And it's actually crucial that in composing a fund, it's not heavily concentrated in a single time period. Just as you don't want it to be concentrated in a single sector or a single stage or that sort of thing. And within the boundaries of being an active early stage lead investor. So diversification by time matters. But once you get out beyond an initial investment period of, say, four years, you create other problems for yourself. Because the Series A deal that you do in year four of a fund that takes, let's say, best case six to seven years to realize, well, you're already into the first year of your fund extension. And in all likelihood, you're going to go further out than that. All of that is going to weigh heavily on the IR.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Well, I think there are cultural barriers because the venture industry has sort of gotten used to having capital pretty locked up and to having controls over the unlocking of that capital. And so it takes a forward-looking group of GPs for starters. It takes a group of LPs who are willing to really frankly play a role in designing that fund structure. And most of all, it takes a secondary buyer who's willing to sign up for a portion of that obligation. And I think when I watch the best secondary buyers in action, they're very efficient. They move with great speed and many of them have the scale to support a structure like this. It's something that I've toyed with for a long time and I think that it may be something we explore even in the future. But those three constituencies have to come together.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Issue because it will actually open up the pool of funds that can participate in venture and private equity. It will actually make it easier for them to increase their allocations. The whole industry watched allocations shrink after the liquidity crisis of 2008. If LPs had had a defined exercisable secondary option in their funds, in many cases they would have pulled it at that point. It could have been a smoother period for everybody.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Predictable path to liquidity. I actually think you could structure a fund vehicle that has a defined secondary option in it. And I actually believe if you look at all the massive amount of secondary capital that's sitting on the sidelines right now, I think you could design a primary fund structure that has a secondary option that an LP could exercise so that they could get actually a relatively predictable way out at a predictable discount to NAV. It might be spread over 24 months or something like that, but that would be a vast improvement over what exists today where LPs, frankly, have to go to market to run a process. They're at the mercy of kind of where the secondary market is at a given time. End up paying big fees to advisors. It's jarring for the GP to some extent. We kind of need to look harder as an industry at this.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Well, so I've been fortunate in all my years at RE to spend a lot of time with RLP base. And I think at the top level, the 10-year fund structure with a couple of extensions doesn't really work. It was invented 40 years ago, and it creates a ton of challenges for everyone involved. What are the challenges? So it compresses the investment cycle for us, right? It drives us to try and put all of the initial capital to work in the first few years of a fund's life. It makes it actually very difficult for a general partner to put their hand up and say, you know what? We need to just back off a bit right now. We need to not be investing this capital. We need to sort of slow down because there's such a premium placed on IRR and generating early liquidity. That's the other sort of, I think, real issue in all of this is LPs need a more”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “I think you draw the line by looking at their pragmatism. You draw the line. I think the best entrepreneurs are able to take people up the mountain with them and show them the view way off into the distance. The best entrepreneurs are able to persuade people of a vision for a changing world.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Intensely commercially driven, but also, frankly, pretty idealistic in wanting to build something that matters in the world.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Look, I mean, in the best case, we get to watch because nothing is more informative than just watching execution. In other senses, though, I mean, we focus in on just trying to understand the challenges that that person has had to overcome in their life. And I think we see a pattern of great entrepreneurs generally didn't have it easy in whatever they were doing before they founded a company. They might have come from pretty modest circumstances, or they might have come to this country with little in the way of resources and had to make their way. They might have struggled with a learning disability. They might have had, frankly, a contentious relationship with a prior boss or colleagues. We look for people who have almost strong survival skills and leadership skills, who can apply the things that they've learned in other periods to growing something great. We look for people who are”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Team, a superstar CEO who can really be our headliner. And when it all begins to work, the market takes it up and runs with it, just like a blockbuster hit. I use that analogy because it captures, I think, our, frankly, obsessive focus on talent. Understanding talent in the market in which we principally invest here in New York is super important. Understanding where people are in their life journey and in their career journey. Are they really ready to commit the 80 to 100 hours a week for four to five years that it really takes to build a company? Have they done enough earlier in their life or are they too far along in their career to be that person that can build a company? And I think the analogies are really strong to finding the right role for the right actor at a certain point in their career.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “I think the similarities are obvious. All of us in the early stage venture business spend our time really thinking about talent. And we could just as easily be talking about leading actors. I mean, we're looking for massively talented people who can play a leading role in a market story that's going to develop. And we are frankly functioning as the producers. We're sitting there trying to bring it all together.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “A close friend to the founder, and that I was good at being sort of a member of a founding team in a building team, but that I was not sort of the natural extreme personality that a lot of entrepreneurs really are. And over time, I realized that I wanted nevertheless to be partners with those people and to be at the table with them through the company building process. And so the venture industry seemed like the obvious place to be able to do that. And so I started plotting my move into this industry about 20 years ago and I joined RE as an associate in 2000. And I've been here ever since. And I've been lucky that this is a firm that has allowed me to grow professionally, giving me a lot of opportunity and where I continue to find great new challenges, both as an investor and in terms of managing and building a firm.”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Well, once upon a time, I was supposed to be a lawyer. I grew up in Louisiana. My father was a trial lawyer. My grandfather was a trial lawyer. It was very much the thing that I was sort of supposed to do. And I was killing time, sort of delaying filing my law school applications that I wasn't really very excited about. And I jumped into an internet commerce company called NetMarket that had been founded by one of my close friends. I realized pretty quickly that what I loved was the company building process and that I was probably never going to be content just being an advisor, that being a principal and being engaged directly working in the company building process was going to be important to me. And over the subsequent years, I was part of a number of sort of pioneers in the Internet Commerce Area. And I also realized during that journey that I was not a natural entrepreneur, that I was great at being”

    2017-07-31 · The Twenty Minute VC · 20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source