Database Reference
In-Depth Information
Ehrenberg:
It's comes right back to the people issue. You could say, “Well,
we've got this super-great technology. We're better, faster. We've got this algo-
rithm.” Honestly, no one cares. What you're selling is an experience, whether
you're selling to a customer or you're selling to a potential employee. You have
to sell the experience. Yes, economics such as salary and stock options are
part of that experience. However, just because you pay a little more doesn't
mean you're going to get somebody.
What's going to get somebody is your ability to sell them on a vision, sell them
on the team, and demonstrate your passion. That's what attracts and closes
top talent. And when I try to talk to some of my more technical founders
about this it's hard, because to them, why they're doing what they're doing is
so obvious. Why wouldn't you want a hundred grand and a point in the com-
pany to work on our awesome technical challenges?
This is when startup founders need to learn how to sell. And I don't care
how technical they are—they need to sell. So coaching them on how to sell,
how to communicate the vision, how to have their passion come across, how
to make somebody feel wanted, not like a commodity—moving beyond the
transaction is very important. You've got to make it personal, and that's hard.
But that's what you have to do to win. That's how you hire great teams.
Gutierrez:
When you raised your initial and subsequent LP [Limited Partner]
funds, how did you sell yourself and what was the big vision?
Ehrenberg:
Back in '09, when I started in the midst of the “nuclear winter”
in the LP market in the wake of the financial crisis, I really didn't spend time
with traditional venture LPs. My initial money was raised from a small group of
top venture general partners who knew me, as well as a bunch of strategics, in
addition to my own money. I had this extremely clear thesis around big data
being an investable theme. I was the first person to talk about this theme. I
also sold the idea of having this traditional venture mindset, but in a small fund
that was initiating investments at the seed stage, but that was also going to
make follow-on investments. The thesis, structure, and strategy combination
was something that resonated with a certain set of sophisticated investors.
After we held our initial closing of $17 million back at the very beginning of
2010, I said to our investors:
We're going to be heads-down for six months. We're not going to
think about raising a dime. We're going to focus on building the IA
Ventures brand as being synonymous with big data. We're going
to build strong relationships with the data science communities on
both coasts. We're going to become a recognized thought leader in
the area, and we're going to hopefully work with some really great
entrepreneurs on some really interesting businesses that are going
to demonstrate our thesis.
