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Fast-forward to the middle of 2010 and the LP market had thawed. As the
market became more liquid, emerging managers were hot. Big data was scorch-
ing hot and there we were. So we had significant institutional demand for IA
Ventures at that point. Initially, when we closed the first fund, it was largely
around selling the big data thesis, but also a higher level of investment rigor. My
Wall Street background and strong emphasis on risk management resonated
with a lot of LPs because it was so unusual. And the way I talked about port-
folio management was also appealing as it was highly structured and analytical
and different than many other venture managers.
When we raised our second fund, we tapped a group of tremendous institu-
tional LPs through a small set of my VC mentors. We had spent time actively
cultivating those relationships and keeping them abreast of our progress with
Fund 1. We said to them, “Here's how we're going to build our first fund. And
we'll come back to you when we're ready to raise our second fund and show
you how we executed our plan” We did, and then we were able to quietly,
quickly, and from whom I believe to be the best partners in the world, raise
$105 million for our second fund. It's been a wonderful partnership thus far.
Gutierrez:
How do impart to your technical founders your knowledge of
relationship and mentorship building?
Ehrenberg:
I try to introduce them to people who could be good mentors
for them. I've found that there are a lot of tremendously successful people
who are more than willing to “pay it forward” by helping young founders. Just
like there were people that helped me, I try and help others, and then those
who have been successful as technical founders are happy to help others as
well. There's nothing like learning by analogy, so when you're able to sit in
front of somebody that's done it and you can draw those parallels to yourself,
it makes it real. It's not just words. So what I do is to help cultivate a set of
relationships around these super-smart young founders so they can build their
own coaching network.
Gutierrez:
You were one of the first to talk about the big data investment
thesis, what was going to happen, and how it was going to evolve. As it con-
tinues to evolve, what do you think the future looks like?
Ehrenberg:
The term “big data” was something that I used very early on.
Back then it was very powerful because (a) nobody was using it and (b) it had
some meaning. The term has now become so distorted and overused that
we never use it. I don't even know what it even means anymore. That is why
I've moved on to this notion of data-centricity. In fact, I would say if you look
at our latest investments, it's not clear that everybody would label them “big
data” investments. For us, it's much more that we have a distinct set of skills
and interests and passions with a strong technical bent. We're looking for
companies that we feel are prosecuting very interesting missions where we
are the best investors for these companies. So the definition of what we're
doing, I'm going to say, has evolved.
