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So those were some of the early influences that helped to inform my thinking.
Then when I saw what was occurring in the realm of advertising technologies,
it was intuitively obvious that the structure of advertising markets and finan-
cial markets would converge over time. Now, when that was going to happen,
I wasn't sure, but that's what informed a lot of my early ad tech investing in
companies such as Invite Media and TubeMogul. These early insights and the
way they have subsequently played out have carried through to IA Ventures.
Gutierrez:
Having had these views and insights, did you start a company to
capitalize on them?
Ehrenberg:
I did start a company myself. Unfortunately, we were way early
and made a ton of mistakes and we failed. While helping build this company
I continued angel investing, so collected a lot of data about how successful
founders build companies and how that differed from my first-hand expe-
rience. After my failure as a company founder I decided there was a way
I could continue to be a builder—by becoming a full-time investor. This is
what prompted me to start a venture firm and to better leverage my core
competencies. So far it has gone pretty well, but venture investing and com-
pany building is a very long time-scale business.
Gutierrez:
How do you guide first-time founders through the thought
process of finding their core competencies?
Ehrenberg:
When we go into an investment, we already have a sense of what
a founder's core competencies are. Just because a founder has an incomplete
set of skills doesn't mean that they can't grow and develop, especially given
that most of the founders we're backing are in their 20s and 30s—these are
young people with lots and lots of time for growth and development. However,
some people simply don't want to change. Let's say a founder is super-tech-
focused and they only want to code. So they don't really want to be the CTO
and they don't want to be the VP of engineering. What they really want is to
be the Chief Architect. What we try and do is back great small teams with
lots of talent. Then, over time, they and we reassess roles and responsibilities
as the company executes their plan and staff accordingly.
There are some technical founders that absolutely, positively want to be the
CEO, yet they know they've got knowledge and experience gaps relative to
those who have successfully scaled big businesses. What many of these techni-
cal founders do is to actively seek out mentoring. They're open-minded and
eager about expanding their skill sets. However, sometimes a founder thinks
that they want to be CEO, but then when they're tasked with recruiting and
finance and general oversight, they realize (a) they suck at it and (b) they hate it.
And that's fine. Part of our job is not only putting our founders in the position
to succeed but also helping them to be honest about their strengths, weak-
nesses, and personal objectives. Once they make an honest assessment, we
help to build a support system around them to help them do what they want
to do at the same time as helping the company be as successful as it can be.
